Nordstrom 2008 Annual Report Download - page 46

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46
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share and per option amounts
NOTE 6: DEBT AND CREDIT FACILITIES
We hold both secured and unsecured debt. The primary collateral for our secured debt is our Nordstrom private label card and Nordstrom VISA credit
card receivables. A summary of long-term debt is as follows:
January 31, 2009 February 2, 2008
Secured
Series 2007-1 Class A Notes, 4.92%, due April 2010 $326 $326
Series 2007-1 Class B Notes, 5.02%, due April 2010 24 24
Series 2007-2 Class A Notes, one-month LIBOR plus 0.06%
per year, due April 2012 454 454
Series 2007-2 Class B Notes, one-month LIBOR plus 0.18%
per year, due April 2012 46 46
Mortgage payable, 7.68%, due April 2020 63 67
Other 17 19
930 936
Unsecured
Senior notes, 5.625%, due January 2009 – 250
Senior notes, 6.25%, due January 2018, net of unamortized discount 646 646
Senior debentures, 6.95%, due March 2028 300 300
Senior notes, 7.00%, due January 2038, net of unamortized discount 343 342
Other 19 23
1,308 1,561
Total long-term debt 2,238 2,497
Less: current portion (24) (261)
Total due beyond one year $2,214 $2,236
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 Nordstrom VISA credit card receivables.
Our mortgage payable is secured by an office building which had a net book value of $82 at the end of 2008.
Other secured and unsecured debt consists primarily of capital lease obligations and liabilities related to the acquisition of Jeffrey.
During the fourth quarter of 2008, we retired our $250 in 5.625% senior notes. The notes were paid using commercial paper borrowings.
The fair value of long-term debt, including current maturities, using quoted market prices of the same or similar issues, was $1,750 and $2,514
at the end of 2008 and 2007.
Required principal payments on long-term debt, excluding capital lease obligations, are as follows:
Fiscal year
2009 $23
2010 355
2011 5
2012 505
2013 5
Thereafter 1,332
The components of interest expense, net are as follows:
Fiscal year 2008 2007 2006
Interest expense on long-term debt and short-term
borrowings $145 $102 $63
Less:
Interest income (3) (16) (15)
Capitalized interest (11) (12) (5)
Interest expense, net $131 $74 $43