Nordstrom 2015 Annual Report Download - page 29

Free Cash Flow (Non-GAAP financial measure)
Free Cash Flow is one of our key liquidity measures, and when used in conjunction with GAAP measures, provides investors with a
meaningful analysis of our ability to generate cash from our business. For the year ended January•30, 2016, Free Cash Flow increased to
$1,131 compared with $96 for the year ended January•31, 2015, primarily due to proceeds received from the sale of our credit card
receivables, partially offset by cash dividends paid.
Free Cash Flow is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for,
operating cash flows or other financial measures prepared in accordance with GAAP. Our method of determining non-GAAP financial
measures may differ from other companies€ methods and therefore may not be comparable to those used by other companies. The financial
measure calculated under GAAP which is most directly comparable to Free Cash Flow is net cash provided by operating activities. The
following is a reconciliation of net cash provided by operating activities to Free Cash Flow:
Fiscal year 2015 2014
Net cash provided by operating activities $2,451 $1,220
Less: capital expenditures (1,082)(861)
Less: cash dividends paid (1,185)(251)
Add: proceeds from sale of credit card receivables originated at third parties 890 …
Add (Less): change in credit card receivables originated at third parties 34 (8)
Add (Less): change in cash book overdrafts 23 (4)
Free Cash Flow $1,131 $96
Net cash used in investing activities ($144)($889)
Net cash used in financing activities ($2,539)($698)
Credit Capacity and Commitments
As of January•30, 2016, we had total short-term borrowing capacity of $800, which is our five-year $800 senior unsecured revolving credit
facility (‚revolverƒ) that expires in April 2020, with an option to extend for an additional year. In April 2015, we terminated our•previous
$800•senior unsecured revolving credit facility that was scheduled to expire March 2018. Under the terms of our revolver, we pay a variable
rate of interest and a commitment fee based on our debt rating. The revolver is available for working capital, capital expenditures and general
corporate purposes. 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.
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 available liquidity under the revolver by an amount equal to the
principal amount of commercial paper.
As of January•30, 2016, we had no issuances outstanding under our commercial paper program and no borrowings outstanding under our
revolver.
Our wholly owned subsidiary in Puerto Rico maintains 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 LIBOR plus 1.275% per annum and also incurs
a fee based on our unused commitment. As of January•30, 2016, we had $52 outstanding on this facility.
We have a registration statement on file with the SEC using a ‚shelfƒ registration process. Under this shelf registration process, we may offer
and sell, from time to time, any combination of the securities described in a prospectus to the registration statement, including registered
debt, provided we maintain Well-known Seasoned Issuer (‚WKSIƒ) status.
We maintain trade and standby letters of credit to facilitate international payments. As of January•30, 2016, we have $8 available under the
trade letter of credit, with $1 outstanding, and $15 available under the standby letter of credit, with $2 outstanding.
Plans for our Manhattan full-line store, which we currently expect to open in 2019, ultimately include owning a condominium interest in a
mixed-use tower and leasing certain nearby properties. As of January•30, 2016, we had approximately $176 of fee interest in land, which is
expected to convert to the condominium interest once the store is constructed.•We have committed to make future installment payments
based on the developer meeting pre-established construction and development milestones. In the unlikely event that this project is not
completed, the opening may be delayed and we may be subject to future losses or capital commitments in order to complete construction or
to monetize our previous investments in the land.
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Nordstrom, Inc. and subsidiaries 29