Nordstrom 2005 Annual Report Download - page 29

Nordstrom, Inc. and subsidiaries 21
Contractual Obligations (Dollars in Millions)
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.
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Long-term debt $1,136.1 $305.8 $461.5 $11.0 $357.8
Capital lease obligations 15.5 2.0 3.9 2.6 7.0
Operating leases 680.6 73.4 143.8 131.4 332.0
Purchase obligations 1,469.9 996.6 379.0 71.2 23.1
Other long-term liabilities 196.9 30.0 39.9 19.2 107.8
Total $3,499.0 $1,407.8 $1,028.1 $235.4 $827.7
Long-term debt includes financing related to the $200.0 million off-balance sheet receivable backed securities due in April 2007. In addition to the
required debt repayments disclosed above, we estimate total interest payments of approximately $576.6 million as of January 28, 2006, payable
over the remaining life of the debts.
Purchase obligations primarily consist of purchase orders for unreceived goods or services and capital expenditure commitments.
Other long-term liabilities consist of workers’ compensation and general liability insurance reserves and postretirement benefits. The repayment
amounts presented above were determined based on historical payment trends. Other long-term liabilities not requiring cash payments, such as
deferred property incentives, were excluded from the table above.
This table also excludes the short-term liabilities, other than the current portion of long-term debt, disclosed on our 2005 balance sheet as the
amounts recorded for these items will be paid in the next year.
Credit Capacity and Commitments
The following table summarizes our amount of commitment expiration per period (in millions):
Total
Amounts
Committed
Less than
1 year 1-3 years 3-5 years
More than
5 years
Other commercial commitments
$500.0 unsecured line of credit,
none outstanding — — — — —
$150.0 variable funding note,
none outstanding — — — — —
Standby letters of credit $11.2 $11.2 — — —
Import letters of credit $19.5 $19.5 — — —
Total $30.7 $30.7 — — —
In November 2005, we replaced our existing $350.0 million unsecured line of credit with a $500.0 million unsecured line of credit, which is available as
liquidity support for our commercial paper program. Under the terms of the agreement, we pay a variable rate of interest and a commitment fee based
on our debt rating. Based upon our current debt rating, we pay a variable rate of interest of LIBOR plus a margin of 0.225% (4.793% at January 28, 2006)
on the outstanding balance and an annual commitment fee of 0.075% on the total capacity. The variable rate of interest increases to LIBOR plus a
margin of 0.325% if more than $250.0 million is outstanding on the facility. The line of credit expires in November 2010, and contains restrictive
covenants, which include maintaining a leverage ratio.
We have a variable funding note backed by Nordstrom private label card and VISA credit card receivables with a borrowing capacity of $150.0 million.
The annual renewal of this note requires both our approval and our issuing bank’s approval and interest is paid based on the actual cost of commercial
paper plus specified fees of 0.15% (4.66% as of January 28, 2006). We also pay a commitment fee of 0.15% for the note based on the amount of the
commitment. The facility can be cancelled or not renewed if our debt ratings fall below Standard and Poor’s BB+ rating or Moody’s Ba1 rating.
We did not make any borrowings under our unsecured line of credit or our variable funding note backed by Nordstrom private label card receivables
during the three years ended January 28, 2006.
We also have universal shelf registrations on file with the Securities and Exchange Commission that permit us to offer an additional $450.0 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.