NOTE 8: Long-Term Debt
|
| | | | | | | | | | |
Debt Category
(In millions) | Weighted-Average Interest Rate at January 31, 2014 |
| | January 31, 2014 |
| | February 1, 2013 |
|
Secured debt:1 | | | | | |
Mortgage notes due through fiscal 2027 | 5.80 | % | | $ | 17 |
| | $ | 19 |
|
Unsecured debt: | |
| | | | |
|
Notes due through fiscal 2018 | 3.88 | % | | 2,271 |
| | 2,269 |
|
Notes due fiscal 2019-2023 | 3.79 | % | | 2,776 |
| | 2,280 |
|
Notes due fiscal 2024-2028 | 7.01 | % | | 416 |
| | 415 |
|
Notes due fiscal 2029-2033 | 6.50 | % | | 397 |
| | 397 |
|
Notes due fiscal 2034-20382 | 6.06 | % | | 1,535 |
| | 1,535 |
|
Notes due fiscal 2039-2043 | 5.09 | % | | 2,222 |
| | 1,731 |
|
Capitalized lease obligations due through fiscal 2035 | |
| | 501 |
| | 431 |
|
Total long-term debt | |
| | 10,135 |
| | 9,077 |
|
Less current maturities | |
| | (49 | ) | | (47 | ) |
Long-term debt, excluding current maturities | |
| | $ | 10,086 |
| | $ | 9,030 |
|
1 Real properties with an aggregate book value of $64 million were pledged as collateral at January 31, 2014, for secured debt.
2 Amount includes $100 million of notes issued in 1997 that may be put at the option of the holder on the 20th anniversary of the issue at par value. None of these notes are currently puttable.
Debt maturities, exclusive of unamortized original issue discounts and capitalized lease obligations, for the next five years and thereafter are as follows: 2014, $2 million; 2015, $508 million; 2016, $1.0 billion; 2017, $750 million; 2018, $1 million; thereafter, $7.4 billion.
The Company’s unsecured notes are issued under indentures that have generally similar terms and, therefore, have been grouped by maturity date for presentation purposes in the table above. The notes contain certain restrictive covenants, none of which is expected to impact the Company’s capital resources or liquidity. The Company was in compliance with all covenants of these agreements at January 31, 2014.
In November 2011, the Company issued $1.0 billion of unsecured notes in two tranches: $500 million of 3.8% notes maturing in 2021 and $500 million of 5.125% notes maturing in 2041. The 2021 and 2041 notes were issued at discounts of approximately $3 million and $5 million, respectively. Interest on these notes is payable semiannually in arrears in May and November of each year until maturity, beginning in May 2012.
In April 2012, the Company issued $2.0 billion of unsecured notes in three tranches: $500 million of 1.625% notes maturing in April 2017, $750 million of 3.12% notes maturing in April 2022 and $750 million of 4.65% notes maturing in April 2042. The 2017, 2022 and 2042 notes were issued at discounts of approximately $2 million, $4 million and $10 million, respectively. Interest on these notes is payable semiannually in arrears in April and October of each year until maturity, beginning in October 2012.
In September 2013, the Company issued $1.0 billion of unsecured notes in two tranches: $500 million of 3.875% notes maturing in September 2023 and $500 million of 5.0% notes maturing in September 2043. The 2023 and 2043 notes were issued at discounts of approximately $5 million and $9 million, respectively. Interest on these notes is payable semiannually in arrears in March and September of each year until maturity, beginning in March 2014.
The discounts associated with these issuances, which include the underwriting and issuance discounts, are recorded in long-term debt and are being amortized over the respective terms of the notes.
The indentures governing the notes issued in 2013, 2012 and 2011 contain a provision that allows the Company to redeem the notes at any time, in whole or in part, at specified redemption prices plus accrued interest to the date of redemption. The indentures also contain a provision that allows the holders of the notes to require the Company to repurchase all or any part of their notes if a change of control triggering event occurs. If elected under the change of control provisions, the repurchase of the notes will occur at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, on such notes to the date of purchase. The indentures governing the notes do not limit the aggregate principal amount of debt securities that the Company may issue, nor is the Company required to maintain financial ratios or specified levels of net worth or liquidity. However, the indentures contain various restrictive covenants, none of which is expected to impact the Company’s liquidity or capital resources.
