Nordstrom 2003 Annual Report Download - page 40

NORDSTROM, INC. and SUBSIDIARIES
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Note 10: Receivable-backed Securities
Total principal receivables of the securitized portfolio at January 31, 2004
and 2003 were approximately $584,828 and $609,784, and receivables
more than 30 days past due were approximately $14,910 and $16,973. Net
charged off receivables for the years ended January 31, 2004, 2003 and
2002 were $28,703, $29,555 and $28,134.
The private label receivables also serve as collateral for a variable funding
facility with a limit of $200,000. Interest on the facility varies based on the
actual cost of commercial paper plus specified fees. Nothing was
outstanding on this facility at January 31, 2004 or 2003.
Our continuing involvement in the securitization of private label receivables
will include pledging new receivables to the master note trust, accounting
for the transaction as a secured financing and servicing the portfolio.
Note 11: Land, Buildings and Equipment
Land, buildings and equipment consist of the following:
January 31, 2004 2003
Land and land improvements $63,636 $60,692
Buildings 768,373 829,885
Leasehold improvements 991,366 943,555
Capitalized software 206,751 150,655
Store fixtures and equipment 1,724,067 1,222,842
Construction in progress 79,016 436,891
3,833,209 3,644,520
Less accumulated depreciation
and amortization (2,108,936) (1,882,976)
Land, buildings and equipment, net $1,724,273 $1,761,544
Capitalized software includes external direct costs, internal direct labor
and employee benefits, as well as interest associated with the development
of the computer software. Depreciation begins in the period in which
the software is ready for its intended use. Construction in progress
includes $24,657 and $61,384 of software in progress at January 31, 2004
and 2003.
The total cost of capitalized leased buildings was $20,035 and $13,884 at
January 31, 2004 and 2003 respectively, with related accumulated
amortization of $14,021 and $9,261. The amortization of capitalized
leased buildings was recorded in depreciation expense.
In January 2003, we sold our Denver Credit facility for $20,000 and
subsequently leased it back. The related gain of $16,022 is being recognized
as a reduction to rent expense evenly over the 15 year life of the lease.
At January 31, 2004, we have contractual commitments of approximately
$249,000 primarily for the construction of new stores or remodeling of
existing stores.
Note 12: Notes Payable
During 2002, we borrowed $15,000 at 2% on our variable funding note
(described in Note 10.) Nothing was outstanding at January 31, 2004
and 2003.
We have an unsecured line of credit totaling $300 million, which is available
as liquidity support for our commercial paper program, and 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%, or 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.
Additionally, in connection with the purchase of foreign merchandise, we
have outstanding import letters of credit totaling $54,536 and standby letters
of credit totaling $1,370 at January 31, 2004.
notes to consolidated financial statements