Go to www.macysinc.com to find financial information for Macy’s. Select For Investors, and click on the most recent annual report or 10-K.
Answer the following questions about Macy’s and its long-term debt:
1. Locate the discussion of Lease Obligations in the Notes to Consolidated Financial Statements. Macy’s has both capital leases and operating leases. What percentage of its future lease commitments are for capital leases?
2. How do the operating lease payments affect Macy’s financial statements? Explain how these operating leases are considered “invisible debt.”
3. What items comprise Macy’s long-term debt? Was any long-term debt issued in the most recent year? Was any long-term debt retired in the most recent year?
4. Describe who is eligible for Macy’s pension and other postretirement benefits. How are these items reported on the financial statements? What discount rate is used for determining the present value of these items? Does this rate differ from the rate used a year ago? If so, what difference does that make on the present value of the obligations?