Nordstrom 2007 Annual Report Download - page 56

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48
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share and per option amounts
Deferred income taxes reflect the net tax effect of temporary differences between amounts recorded for financial reporting purposes and amounts
used for tax purposes. The major components of deferred tax assets and liabilities are as follows:
February 2, 2008 February 3, 2007
Compensation and benefits accruals $105 $86
Accrued expenses 56 52
Merchandise inventories 28 25
Securitization — 24
Land, buildings and equipment basis and
depreciation differences — 15
Gift cards and gift certificates 15 13
Loyalty reward certificates 10 9
Allowance on accounts receivables 28 6
Federal benefit of state taxes 9—
Other 13 —
Total deferred tax assets 264 230
Land, buildings and equipment basis and
depreciation differences (4) —
Other — (8)
Total deferred tax liabilities (4) (8)
Net deferred tax assets $260 $222
NOTE 8: LONG-TERM DEBT
We hold both secured and unsecured debt. The primary collateral for our secured debt is our Nordstrom private label card and co-branded
Nordstrom VISA credit card receivables. A summary of long-term debt is as follows:
February 2, 2008 February 3, 2007
Secured
Series 2007-1 Class A Notes, 4.92%, due April 2010 $326 —
Series 2007-1 Class B Notes, 5.02%, due April 2010 24 —
Series 2007-2 Class A Notes, one-month LIBOR plus 0.06%
per year, due April 2012 454 —
Series 2007-2 Class B Notes, one-month LIBOR plus 0.18%
per year, due April 2012 46 —
Mortgage payable, 7.68%, due April 2020 67 $70
Other 19 14
936 84
Unsecured
Senior notes, 5.625%, due January 2009 250 250
Senior notes, 6.25%, due January 2018, net of unamortized discount 646 —
Senior debentures, 6.95%, due March 2028 300 300
Senior notes, 7.00%, due January 2038, net of unamortized discount 342 —
Other 22 6
Fair market value of interest rate swap 1(9)
1,561 547
Total long-term debt 2,497 631
Less current portion (261) (7)
Total due beyond one year $2,236 $624
Both the Series 2007-1 Class A & B Notes and the Series 2007-2 Class A & B Notes are secured by substantially all of the Nordstrom private label card
receivables and a 90% interest in the co-branded Nordstrom VISA credit card receivables.
Our mortgage payable is secured by an office building which had a net book value of $86 at the end of 2007.
Other secured and unsecured debt consists primarily of capital lease obligations and liabilities related to the acquisition of Jeffrey.