Nordstrom 2003 Annual Report Download - page 23

Available Credit
We have an unsecured revolving credit facility totaling $300 million that
expires in November 2004. Under the terms of the agreement, we pay a
variable rate of interest based on LIBOR plus a margin of 0.50%
(1.6% at January 31, 2004.) The margin increases to 0.63% if more than
$150 million is outstanding on the facility. The line of credit agreement
contains restrictive covenants, which include maintaining certain financial
ratios. We also pay a commitment fee for the line based on our debt rating.
As of January 31, 2004, no borrowings have been made against this
revolving credit facility. We plan to renew this credit facility or replace it
with a similar facility prior to its expiration. Based on the factors above,
we do not believe the expiration of this credit facility will have an impact
on our liquidity.
Also in November 2001, we issued a variable funding note backed by
Nordstrom private label receivables with a $200 million capacity that we
renew annually. Interest on this facility varies based on the actual cost
of commercial paper plus specified fees. As of January 31, 2004, no
borrowings were outstanding against this note.
Additionally, we have universal shelf registrations on file with the Securities
and Exchange Commission that permit us to offer an additional $450
million of securities to the public. These registration statements allow
us to issue various types of securities, including debt, common stock, warrants
to purchase common stock, warrants to purchase debt securities and warrants
to purchase or sell foreign currency.
Debt Ratings
The following table shows our credit ratings at the date of this report.
Standard
Credit Ratings Moody’s and Poor’s
Senior unsecured debt Baa1 A-
Commercial paper P-2 A-2
Outlook Stable Stable
These ratings could change depending on our performance and other factors.
A significant ratings drop could result in the termination of the $200
million Nordstrom private label receivables variable funding note and
an interest rate change on the $300 million revolving credit facility. The
remainder of our outstanding debt is not subject to termination or interest
rate adjustments based on changes in credit ratings.
Contractual Obligations
The following table summarizes our contractual obligations and the
expected effect on our liquidity and cash flows. We expect to fund these
commitments primarily with operating cash flows generated in the normal
course of business and credit available to us under existing and potential
future facilities.
Less More
than 1-3 3-5 than 5
Fiscal Year Total 1 year years years years
Long-term debt $1,234.3 $5.4 $405.4 $457.2 $366.3
Capital lease
obligations 16.2 2.4 3.5 3.1 7.2
Operating leases 718.2 73.3 134.7 119.5 390.7
Purchase
obligations 341.8 231.9 100.3 7.3 2.3
Other long-term
liabilities 86.2 4.1 12.9 7.3 61.9
Total $2,396.7 $317.1 $656.8 $594.4 $828.4
Long-term debt includes $200 million in off-balance sheet financing
related to our VISA securitization, which comes due in April 2007 and does
not include the $196.8 million of debt repurchased in the first quarter of
2004. In addition to the required debt repayment disclosed above, we estimate
total interest payments of approximately $669 million being paid over
the remaining life of the debt.
This table excludes the short-term liabilities, other than the current
portion of long-term debt, disclosed on our balance sheets as the amounts
recorded for these items will be paid in the next year. Purchase orders
totaling $681.2 million have also been excluded from this table.
Other long-term liabilities include estimated repayment schedules
primarily for postretirement benefits based on their current payout rates.
Other long-term liabilities not requiring cash payments, such as deferred
revenue, were excluded from the table above.
management’s discussion and analysis
NORDSTROM, INC. and SUBSIDIARIES
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