Nordstrom 2013 Annual Report Download - page 51

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Nordstrom, Inc. and subsidiaries 51
Required principal payments on long-term debt, excluding capital lease obligations, are as follows:
Fiscal year
2014 $6
2015 6
2016 332
2017 657
2018 9
Thereafter 2,124
Interest Expense
The components of interest expense, net are as follows:
Fiscal year 2013 2012 2011
Interest on long-term debt and short-term borrowings $176 $167 $139
Less:
Interest income (1) (2) (2)
Capitalized interest (14) (5) (7)
Interest expense, net $161 $160 $130
Credit Facilities
As of February 1, 2014, we had total short-term borrowing capacity available for general corporate purposes of $800.
In March 2013, we terminated both our $600 unsecured revolving credit facility that was scheduled to expire in June 2016, and our $200
2007-A Variable Funding Note that was scheduled to expire in January 2014. We replaced these with a new five-year $800 senior unsecured
revolving credit facility (“revolver”) that expires in March 2018. Also in March 2013, our wholly owned subsidiary Nordstrom fsb terminated its
$100 variable funding facility.
Under the terms of our new revolver, we pay a variable rate of interest and a commitment fee based on our debt rating. The new revolver is
available for working capital, capital expenditures and general corporate purposes and backs our commercial paper program. We have the
option to increase the revolving commitment by up to $200, to a total of $1,000, provided that we obtain written consent from the lenders.
The new revolver requires that we maintain an adjusted debt to earnings before interest, income taxes, depreciation, amortization and rent
(“EBITDAR”) leverage ratio of less than four times. As of February 1, 2014 and February 2, 2013, we were in compliance with this covenant.
Our $800 commercial paper program allows us to use the proceeds to fund operating cash requirements. Under the terms of the commercial
paper agreement, we pay a rate of interest based on, among other factors, the maturity of the issuance and market conditions. The issuance
of commercial paper has the effect, while it is outstanding, of reducing borrowing capacity under our revolver by an amount equal to the
principal amount of commercial paper.
During 2013, we had no issuances under our commercial paper program and no borrowings under our new revolver, the terminated $600
credit facility, or the terminated Nordstrom fsb credit facility. During 2012, we had no issuances under our commercial paper program and no
borrowings under our $600 credit facility, the $200 Variable Funding Note, or the $100 Nordstrom fsb credit facility.
In November 2013, our wholly owned subsidiary in Puerto Rico entered into a $52 unsecured borrowing facility to support our expansion into
that market. The facility expires in November 2018 and borrowings on this facility incur interest based upon the one-month LIBOR plus
1.275% per annum. During 2013, $2 was borrowed and is outstanding on this facility.
Table of Contents
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and unit amounts