DEBT OBLIGATIONS

6 Months Ended

Aug. 12, 2017

DEBT OBLIGATIONS

DEBT OBLIGATIONS

2.DEBT OBLIGATIONS

Long-term debt consists of:

	August 12,		January 28,
	2017		2017
1.50% to 8.00% Senior Notes due through 2048	$	12,799	$	11,311
5.63% to 12.75% Mortgages due in varying amounts through 2027		33		38
0.91% Commercial paper borrowings		—		1,425
Other		452		541
Total debt, excluding capital leases and financing obligations		13,284		13,315
Less current portion		(898)		(2,197)
Total long-term debt, excluding capital leases and financing obligations	$	12,386	$	11,118

In the second quarter of 2017, the Company issued $400 of senior notes due in fiscal year 2022 bearing an interest rate of 2.80%,  $600 of senior notes due in fiscal year 2027 bearing an interest rate of 3.70% and $500 of senior notes due in fiscal year 2048 bearing an interest rate of 4.65%.  The Company also repaid $1,425of commercial paper in the first two quarters of 2017 bearing an interest rate of 0.91% to 1.15%.  In connection with the senior note issuances, the Company also terminated forward-starting interest rate swap agreements with an aggregate notional amount of $600. These forward-starting interest rate swap agreements were hedging the variability in future benchmark interest payments attributable to changing interest rates on the forecasted issuance of fixed-rate debt issued during the second quarter of 2017.  Since these forward-starting interest rate swap agreements were classified as cash flow hedges, the unamortized loss of $20,  $12net of tax, has been deferred in Accumulated Other Comprehensive Loss and will be amortized to earnings as the interest payments are made. 

Additionally, in the third quarter of 2017, the Company repaid, upon maturity, $600 of senior notes bearing an interest rate of 6.40%, with proceeds from the second quarter senior notes issuances. 

The fair value of the Company’s long-term debt, including current maturities, was estimated based on the quoted market prices for the same or similar issues adjusted for illiquidity based on available market evidence.  If quoted market prices were not available, the fair value was based upon the net present value of the future cash flow using the forward interest rate yield curve in effect at August 12, 2017 and January 28, 2017.  At August 12, 2017, the fair value of total debt was $13,766 compared to a carrying value of $13,284.  At January 28, 2017, the fair value of total debt was $13,905 compared to a carrying value of $13,315.