UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 31, 1996
__________________
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________to________
Commission file number 0-12994
Nordstrom Credit, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Colorado 91-1181301
________________________________ ___________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
13531 East Caley, Englewood, Colorado 80111
_______________________________________________________
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 303-397-4700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.50 par value
_______________________________
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES /X/ NO / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/
On March 29, 1996 Registrant had 10,000 shares of Common stock ($.50 par value)
outstanding; all such shares are owned by Registrant's parent, Nordstrom, Inc.
The Registrant meets the conditions set forth in General Instruction J(1)(a)
and (b)of Form 10-K and is therefore filing this Form with the reduced
disclosure format.
1 of 18
PART I
Item 1. Business.
- ------------------
The information required under this item is included in Note 1 to
the Financial Statements on page 13 of this report, which is incorporated
herein by reference.
Item 2. Properties.
- --------------------
The Company owns an office building in Englewood, Colorado where it locates
its principal offices.
Item 3. Legal Proceedings.
- ---------------------------
The Company is not a party to any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
Not required under reduced disclosure format.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- ------------------------------------------------------------------------------
The class of securities registered is the Company's Common Stock, $.50 par
value per share. There are 100,000 shares of authorized Common Stock, of which
10,000 shares were issued and outstanding as of March 29, 1996. The Company's
common stock is owned entirely by Nordstrom, Inc. The stock has not been
traded and, accordingly, no market value has been established. In addition,
no dividends have been paid or declared.
Item 6. Selected Financial Data.
- ---------------------------------
Not required under reduced disclosure format.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
- -------------------------------------------------------------------------
Service charge income and service fees paid to Nordstrom National Credit Bank
(the "Bank") increased in 1995 primarily due to an increase in receivables
generated by the Bank's VISA card program, which commenced in May, 1994.
Interest expense increased in 1995 due to higher levels of debt outstanding.
Bad debt expense increased in 1995 as a result of the growth of the Bank's VISA
card program, for which the Company bears credit risk.
2 of 18
Certain other information required under this item is included in Note 1 and
Note 5 to the Financial Statements on pages 13 and 14 respectively, of this
report, which are incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
- ----------------------------------------------------
A) Financial Statements and Supplementary Data
The financial statements listed in the Index to Financial Statements
and Schedule on page 7 of this Report are incorporated herein by
reference.
B) Other Financial Statements and Schedule
The schedule required under Regulation S-X is filed pursuant to Item
14 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ------------------------------------------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
- ------------------------------------------------------------
Not required under reduced disclosure format.
Item 11. Executive Compensation.
- --------------------------------
Not required under reduced disclosure format.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
- ------------------------------------------------------------
Not required under reduced disclosure format.
Item 13. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Not required under reduced disclosure format.
3 of 18
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- --------------------------------------------------------------------------
(a)1. Financial Statements
--------------------
The following financial statements of the Company and the Independent
Auditors' Report are incorporated by reference in Part II, Item 8:
Independent Auditors' Report
Statements of Earnings
Balance Sheets
Statements of Investment of Nordstrom, Inc.
Statements of Cash Flows
Notes to Financial Statements
(a)2. Financial Statement Schedules
-----------------------------
The financial statement schedule listed in the Index to Financial
Statements and Schedule on page 7 of this Report is incorporated
herein by reference.
(a)3. Exhibits
--------
(3.1) Articles of Incorporation of the Registrant are hereby incorporated
by reference from the Registrant's Form 10-K for the year ended
January 31, 1991, Exhibit 3.1.
(3.2) By-laws of the Registrant are hereby incorporated by reference from
the Registrant's Form 10-K for the year ended January 31, 1991,
Exhibit 3.2.
(3.3) Amendment to the Bylaws of the Registrant dated December 19, 1995,
is filed herein as an Exhibit.
(4.1) Indenture between Registrant and First Interstate Bank of Denver,
N.A., as successor trustee, dated November 15, 1984, the First
Supplement thereto dated January 15, 1988, the Second Supplement
thereto dated June 1, 1989, and the Third Supplement thereto dated
October 19, 1990 are hereby incorporated by reference from
Registration No. 33-3765, Exhibit 4.2; Registration No. 33-19743,
Exhibit 4.2; Registration No. 33-29193, Exhibit 4.3; and Registrant's
Annual Report on Form 10-K for the year ended January 31, 1991,
Exhibit 4.2, respectively.
(4.2) Trustee Resignation of First Interstate Bank of Washington, N.A. dated
March 13, 1995 is hereby incorporated by reference from the
Registrant's Form 10-K for the year ended January 31, 1995,
Exhibit 4.2.
(4.3) Trustee Acceptance of First Interstate Bank of Denver, N.A. dated
March 13, 1995 is hereby incorporated by reference from the
Registrant's Form 10-K for the year ended January 31, 1995, Exhibit
4.3.
4 of 18
(10.1) Investment Agreement dated October 8, 1984 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the
Registrant's Form 10, Exhibit 10.1.
(10.2) Operating Agreement dated August 30, 1991 between Registrant and
Nordstrom National Credit Bank is hereby incorporated by reference
from the Registrant's Form 10-Q for the quarter ended July
31, 1991, Exhibit 10.1, as amended.
(10.3) Operating Agreement for VISA Accounts and Receivables dated May 1,
1994 between Registrant and Nordstrom National Credit Bank is hereby
incorporated by reference from Registration No. 33-55905, Exhibit
10.1.
(10.4) Credit Agreement dated June 23, 1995 between Registrant and a group of
commercial banks is hereby incorporated by reference from the
Registrant's Form 10-Q for the quarter ended July 31, 1995, Exhibit
10.1.
(10.5) Loan Agreement dated November 24, 1992 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the
Registrant's Form 10-K for the year ended January 31, 1993, Exhibit
10.6.
(10.6) Loan Agreement dated June 10, 1985, as amended May 19, 1994, between
Registrant and Morgan Guaranty Trust Company of New York is hereby
incorporated by reference from the Registrant's Form 10-K for the year
ended January 31, 1995, Exhibit 10.10.
(12.1) Computation of Ratio of Earnings Available for Fixed Charges
to Fixed Charges is filed herein as an Exhibit.
(23.1) Independent Auditors' Consent is filed herein as an Exhibit.
(27.1) Financial Data Schedule is filed herein as an Exhibit.
All other exhibits are omitted because they are not applicable, or not
required, or because the required information is included in the financial
statements or notes thereto.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the last quarter of the
period for which this report is filed.
5 of 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
NORDSTROM CREDIT, INC.
(Registrant)
Date March 29, 1996 by /s/ John A. Goesling
__________________ ____________________________________________
John A. Goesling
Executive Vice President and Treasurer
(Principal Accounting and Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
/s/ John A. Goesling /s/ Raymond A. Johnson
_____________________________________ _____________________________________
John A. Goesling Raymond A. Johnson
Director, Executive Vice President Director
and Treasurer
(Principal Accounting and Financial
Officer)
/s/ John C. Walgamott /s/ John J. Whitacre
_____________________________________ ______________________________________
John C. Walgamott John J. Whitacre
Director and President Director
(Principal Executive Officer)
Date March 29, 1996
______________________
6 of 18
NORDSTROM CREDIT, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Page
Number
------
Independent Auditors' Report 8
Statements of Earnings 9
Balance Sheets 10
Statements of Investment of Nordstrom, Inc. 11
Statements of Cash Flows 12
Notes to Financial Statements 13
Additional financial information required to be furnished -
Financial Statement Schedule:
II - Valuation and Qualifying Accounts 18
All other schedules have been omitted because they are inapplicable, not
required, or the information is included elsewhere in the financial statements
or notes thereto.
7 of 18
INDEPENDENT AUDITORS' REPORT
Board of Directors
Nordstrom Credit, Inc.
Englewood, Colorado
We have audited the accompanying balance sheets of Nordstrom Credit, Inc. as of
January 31, 1996 and 1995, and the related statements of earnings, investment
of Nordstrom, Inc. and cash flows for each of the three years in the period
ended January 31, 1996. Our audits also included the financial statement
schedule listed in Item 14(a)2. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Nordstrom Credit, Inc. as of January 31,
1996 and 1995, and the results of its operations and its cash flows for each
of the three years in the period ended January 31, 1996, in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
Deloitte & Touche LLP
Seattle, Washington
March 8, 1996
8 of 18
NORDSTROM CREDIT, INC.
STATEMENTS OF EARNINGS
(Dollars in thousands)
Year Ended January 31, 1996 1995 1994
- ---------------------- ------- ------- -------
Revenue:
Service charge income $122,973 $92,592 $91,026
Rental income from Nordstrom
National Credit Bank 1,044 1,044 1,044
------- ------- -------
Total revenue 124,017 93,636 92,070
Expenses:
Interest, net 42,157 31,074 29,465
Service fees paid to Nordstrom
National Credit Bank 32,558 28,056 28,551
Bad debts 12,752 940 -
Other general and administrative 1,464 1,521 1,682
------- ------- -------
Total expenses 88,931 61,591 59,698
------- ------- -------
Earnings before income taxes 35,086 32,045 32,372
Income taxes 12,600 11,600 11,700
------- ------- -------
Net earnings $ 22,486 $20,445 $20,672
======= ======= =======
Ratio of earnings available for
fixed charges to fixed charges 1.83 2.03 2.09
======= ======= =======
<FN>
See notes to financial statements.
9 of 18
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(Dollars in thousands)
January 31, 1996 1995
- ----------- -------- --------
ASSETS
- ------
Cash and cash equivalents $ 91 $ 440
Customer accounts receivable, net 874,858 656,263
Other accounts receivable 7,217 4,807
Property and equipment, net 5,396 5,685
Other assets 2,122 1,429
-------- --------
$889,684 $668,624
======== ========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- ---------------------------------------------
Notes payable to Nordstrom, Inc. $ 86,000 $148,000
Notes payable to bank 50,000 50,000
Commercial paper 182,501 37,388
Accrued interest, taxes and other 9,424 10,963
Long-term debt 369,100 252,100
-------- --------
Total liabilities 697,025 498,451
Investment of Nordstrom, Inc. 192,659 170,173
-------- --------
$889,684 $668,624
======== ========
<FN>
See notes to financial statements.
10 of 18
NORDSTROM CREDIT, INC.
STATEMENTS OF INVESTMENT OF NORDSTROM, INC.
(Dollars in thousands except per share amount)
Common Stock, $.50 par value,
100,000 shares authorized
------------------------- Retained
Shares Amount Earnings Total
------ ------ -------- -----
Balance at
February 1, 1993 10,000 $55,058 $ 73,998 $129,056
Net earnings - - 20,672 20,672
------ ------- ------- --------
Balance at
January 31, 1994 10,000 55,058 94,670 149,728
Net earnings - - 20,445 20,445
------ ------- ------- --------
Balance at
January 31, 1995 10,000 55,058 115,115 170,173
Net earnings - - 22,486 22,486
------ ------- ------- --------
Balance at
January 31, 1996 10,000 $55,058 $137,601 $192,659
====== ======= ======== ========
<FN>
See notes to financial statements.
11 of 18
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended January 31, 1996 1995 1994
- ---------------------- ------- ------- -------
OPERATING ACTIVITIES:
Net earnings $ 22,486 $20,445 $20,672
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 772 924 640
Change in:
Other accounts receivable (2,410) (830) (269)
Accrued interest, taxes and other (1,539) 1,298 (304)
------- ------- -------
Net cash provided by
operating activities 19,309 21,837 20,739
------- ------- -------
INVESTING ACTIVITIES:
(Increase) decrease in investment in
customer accounts receivable, net (218,595) (91,768) 18,716
Additions to property
and equipment, net (35) (30) (167)
------- ------- -------
Net cash (used in) provided by
investing activities (218,630) (91,798) 18,549
------- ------- -------
FINANCING ACTIVITIES:
(Decrease) increase in notes payable
to Nordstrom, Inc. (62,000) 35,500 -
Increase in notes payable to banks - 25,000 -
Increase in commercial paper 145,113 22,051 2,018
Proceeds from issuance of
long-term debt, net 140,859 49,656 -
Principal payments on long-term debt (25,000) (63,500) (40,000)
------- ------- -------
Net cash provided by (used in)
financing activities 198,972 68,707 (37,982)
------- ------- -------
Net (decrease) increase in cash and
cash equivalents (349) (1,254) 1,306
Cash and cash equivalents at beginning
of year 440 1,694 388
------- ------- -------
Cash and cash equivalents at end of year $ 91 $ 440 $ 1,694
======== ======= =======
<FN>
See notes to financial statements.
12 of 18
NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 - DESCRIPTION OF BUSINESS
Nordstrom Credit, Inc. (the "Company"), a wholly-owned subsidiary of Nordstrom,
Inc. ("Nordstrom") was incorporated in the State of Washington in 1982 and
reincorporated in the State of Colorado in 1990. The primary business of the
Company is to finance customer accounts receivable generated under revolving
charge accounts through sales of merchandise in Nordstrom stores ("Accounts"),
and through purchases by customers using the Nordstrom National Credit Bank
the "Bank") VISA cards ("VISA Accounts"). The Accounts and the VISA Accounts
are originated through the use of credit cards issued by the Bank, a national
banking association organized as a wholly-owned subsidiary of Nordstrom,
effective August 30, 1991. The Bank's VISA card program commenced in May 1994.
The Company and the Bank are parties to an Operating Agreement dated August 30,
1991 (the "Operating Agreement") pursuant to which the Company purchases
Accounts from the Bank for a price equal to the amount of Accounts originated
less an allowance for amounts to be written off (the "holdback allowance").
The Company and the Bank are also parties to an Operating Agreement for VISA
Accounts and Receivables (the "VISA Operating Agreement") dated May 1, 1994.
Under this agreement, the Company purchases VISA Accounts from the Bank under
the same terms and conditions as the Operating Agreement, with the exception of
the allowance for amounts to be written off. Amounts written off are charged
to the Company, except for amounts written off with respect to sales occurring
at Nordstrom stores, for which Nordstrom has agreed to indemnify the Company.
Under the terms of both Operating Agreements, the Bank performs the servicing
functions for the Accounts and the VISA Accounts, and the Company pays the Bank
a servicing fee based on the amount of such Accounts originated. The rate was
1.59% until November 30, 1995 and was increased to 2.0% effective December 1,
1995.
The Company and Nordstrom are parties to an Investment Agreement dated October
8, 1984 (the "Investment Agreement") which, among other things, governs
ownership of Company stock and the financial relationships between Nordstrom
and the Company. The Investment Agreement requires that Nordstrom maintain the
Company's ratio of earnings available for fixed charges to fixed charges at not
less than 1.25:1 and further requires that Nordstrom retain ownership of all
the outstanding shares of stock of the Company. This agreement does not,
however, represent a guarantee by Nordstrom of the payment of any obligation
of the Company.
The presentation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses in
the accompanying financial statements. Actual results could differ from those
estimates.
Certain reclassifications of prior year balances have been made for consistent
presentation.
13 of 18
NOTE 2 - RENTAL INCOME
The Company owns an office building in Englewood, Colorado, and leases space in
the building to the Bank under a month-to-month agreement for $87 per month.
NOTE 3 - INTEREST EXPENSE
The components of net interest expense are as follows:
Year ended January 31, 1996 1995 1994
- ---------------------- ------- ------- -------
Notes payable to Nordstrom, Inc. $ 4,273 $ 2,940 $ 1,696
Notes payable to banks 2,942 1,766 771
Commercial paper 7,242 3,320 1,590
Long-term debt 27,788 23,161 25,543
------- ------- -------
Total interest expense 42,245 31,187 29,600
Less: Interest income (88) (113) (135)
------- ------- -------
Interest, net $42,157 $31,074 $29,465
======= ======= =======
NOTE 4 - INCOME TAXES
The Company files consolidated income tax returns with Nordstrom. Income taxes
have been provided on a separate return basis, and the difference between the
effective tax rate and the statutory Federal income tax rate is due to the
provision for state and local income taxes. At January 31, 1996 and 1995,
amounts due to Nordstrom for income taxes totaled $1,200 and $1,500. The
Company has no significant deferred taxes.
NOTE 5 -CUSTOMER ACCOUNTS RECEIVABLE
Customer accounts receivable, net, consists of the following:
January 31, 1996 1995
- ----------- -------- --------
Accounts $690,756 $592,034
VISA Accounts 213,495 87,187
-------- --------
904,251 679,221
Holdback allowance (29,393) (22,958)
-------- --------
Customer accounts receivable, net $874,858 $656,263
======== ========
The Company has no credit risk with respect to the Accounts, as Nordstrom bears
the risk of credit loss with respect to these Accounts.
14 of 18
NOTE 5 (continued)
The Company's credit risk with respect to Visa Accounts is concentrated in the
geographic regions in which Nordstrom operates stores. At January 31, 1996
and 1995, approximately 50% of the VISA Accounts were concentrated in
California. Concentration of the remaining VISA Accounts is considered to be
limited due to their geographical dispersion.
NOTE 6 - OTHER ACCOUNTS RECEIVABLE
Other accounts receivable consists of amounts due from the Bank for net
activity in Accounts and VISA Accounts, less service fees due the Bank. These
amounts are settled on a second business day basis. At January 31, 1996, other
accounts receivable also includes $2,975 due from Nordstrom primarily for
settlement of bad debt expense, which was settled on February 26, 1996.
NOTE 7 - NOTES PAYABLE AND COMMERCIAL PAPER
The notes payable to bank represents amounts borrowed from a commercial bank as
fiduciary under a master note agreement which provides for borrowings up to
$50,000. Borrowings under the Agreement bear interest at floating rates based
on a published short-term interest rate composite index (5.4% and 6.0% at
January 31, 1996 and 1995) and mature up to six months from the date of
borrowing or on demand.
The notes payable to Nordstrom, Inc. represents amounts borrowed from Nordstrom
under an Agreement dated November 24, 1992 which provides for borrowings from
time to time, depending on seasonal cash flow requirements. Borrowings under
the Agreement bear interest at floating rates based on a published short-term
interest rate composite index (5.4% and 6.0% at January 31, 1996 and 1995) and
mature up to six months from the date of borrowing or on demand.
Commercial paper outstanding at January 31, 1996 bears interest at 5.1% to
5.8%, and matures from February 1, 1996 to July 15, 1996.
A summary of notes payable and commercial paper is as follows:
Year ended January 31, 1996 1995 1994
- ---------------------- -------- -------- --------
Average daily borrowings
outstanding:
Nordstrom $ 72,843 $ 60,651 $ 54,643
Other 172,178 104,722 75,300
Maximum amount outstanding:
Nordstrom 191,500 204,000 182,500
Other 303,072 209,605 117,023
Weighted average interest rate:
During the year:
Nordstrom 5.9% 4.8% 3.1%
Other 5.9% 4.9% 3.1%
At year-end:
Nordstrom 5.4% 6.0% 3.0%
Other 5.5% 6.0% 3.1%
15 of 18
NOTE 7 (continued)
The Company has a $300,000 unsecured line of credit with a group of commercial
banks which is available as liquidity support for notes payable to bank and
commercial paper issued by the Company, and expires June 30, 2000. Under the
terms of the line of credit agreement, the Company must, among other things,
comply with the terms of the Investment Agreement between the Company and
Nordstrom and the Operating Agreements between the Company and the Bank, and
maintain a ratio of total debt to tangible net worth no greater than 7 to 1.
The Company pays commmitment fees for the line in lieu of compensating balance
requirements.
The carrying amount of the notes payable and commercial paper approximates
fair value because of the short maturity of these instruments.
NOTE 8 - LONG-TERM DEBT
Long-term debt consists of the following:
January 31, 1996 1995
- ----------- -------- --------
Medium-term notes, 7.83% - 9.6%,
due 1996 - 2001 $226,000 $209,000
Notes Payable, 6.7%, due 2005 100,000 -
Sinking fund debentures, 9.375%,
due 2016, payable in
annual installments of $3,750
beginning in 1997 43,100 43,100
-------- --------
Total long-term debt $369,100 $252,100
======== ========
Aggregate principal payments on long-term debt for the next five fiscal
years are as follows: 1996 - $73,000, 1997 - $53,750, 1998 - $53,750,
1999 - $3,750, and 2000 - $45,750.
The fair value of long-term debt at January 31, 1996 and 1995, estimated using
quoted market prices of the same or similar issues with the same
remaining maturity, was approximately $403,000 and $257,000.
In February 1996, the Company prepaid $43,100 of sinking fund debentures at a
premium of $1,965.
16 of 18
NOTE 9 - SUPPLEMENTARY CASH FLOW INFORMATION
For purposes of the Statements of Cash Flows, the Company considers all
short-term investments with a maturity at date of purchase of three
months or less to be cash equivalents. The carrying amount approximates
fair value because of the short maturity of these instruments.
Supplementary cash flow information is as follows:
Year Ended January 31, 1996 1995 1994
- ---------------------- ------- ------- -------
Cash paid during the year for:
Interest $41,268 $30,005 $30,224
Income taxes paid to
Nordstrom, Inc. 12,900 11,692 11,568
17 of 18
NORDSTROM CREDIT, INC.
SCHEDULE II - VALUATION AND
QUALIFYING ACCOUNTS
(Dollars in thousands)
Column A Column B Column C Column D Column E
Additions Deductions
- ----------- ---------- -------------------- ------------------- --------
Account
Balance Charged to Charged write-offs Balance
beginning costs and to other net of end of
Description of period expenses accounts recoveries period
- ----------- ----------- --------- -------- ---------- -------
Holdback allowance -
customer accounts
receivable
Year ended
January 31, 1994 $23,969 $ - $25,713* $26,537 $23,145
Year ended
January 31, 1995 $23,145 $ 940 $19,279* $20,406 $22,958
Year ended
January 31, 1996 $22,958 $12,752 $26,837* $33,154 $29,393
<FN>
* The Company purchases Accounts net of this amount which represents the
allowance for uncollectible amounts. Bad debt expenses are reflected on
the books of Nordstrom for Accounts and VISA Accounts generated through sales
at Nordstrom stores.
</table
>
18 of 18
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------------------------------------------ -----------------------------------
3.1 Articles of Incorporation Incorporated by reference from the
Registrant's Form 10-K for the year
ended January 31, 1991, Exhibit 3.1.
3.2 By-laws Incorporated by reference
from the Registrant's Form
10-K for the year ended January
31, 1991, Exhibit 3.2.
3.3 Amendment to the By-laws dated Filed herewith electronically.
December 19, 1995
4.1 Indenture between Registrant and Incorporated by reference from
First Interstate Bank of Denver, Registration No. 33-3765, Exhibit
N.A., as successor trustee, dated 4.2; Registration No. 33-19743,
November 15, 1984, the First Sup- Exhibit 4.2; Registration No.
plement thereto dated January 15, 33-29193, Exhibit 4.3, and
1988, the Second Supplement thereto Registrant's Annual Report on Form
dated June 1, 1989, and the Third 10-K for the year ended January 31,
Supplement thereto dated October 1991, Exhibit 4.2, respectively.
19, 1990
4.2 Trustee Resignation of First Inter- Incorporated by reference from
state Bank of Washington, N.A. Registrant's Form 10-K for the
dated March 13, 1995 year ended January 31, 1995,
Exhibit 4.2.
4.3 Trustee Acceptance of First Inter- Incorporated by reference from
state Bank of Denver, N.A. dated Registrant's Form 10-K for the
March 13, 1995 year ended January 31, 1995,
Exhibit 4.3.
10.1 Investment Agreement dated October Incorporated by reference from
8, 1984 between Registrant and Registrant's Form 10, Exhibit 10.1.
Nordstrom, Inc.
10.2 Operating Agreement dated August Incorporated by reference from
30, 1991 between Registrant and Registrant's Form 10-Q for the
Nordstrom National Credit Bank quarter ended July 31, 1991,
Exhibit 10.1, as amended.
10.3 Operating Agreement for VISA Incorporated by reference from
Accounts and Receivables Registration No. 33-55905, Exhibit
dated May 1, 1994 between 10.1.
Registrant and Nordstrom
National Credit Bank
10.4 Credit Agreement dated June 23, 1995 Incorporated by reference from
between Registrant and a group of Registrant's Form 10-Q for the
commercial banks. quarter ended July 31, 1995,
Exhibit 10.1.
10.5 Loan Agreement dated November 24, Incorporated by reference from
1992 between Registrant and Registrant's Form 10-K for the
Nordstrom, Inc. year ended January 31, 1993,
Exhibit 10.6.
10.6 Loan Agreement dated June 10, 1985, Incorporated by reference from
as amended May 16, 1994, between Registrant's Form 10-K for the
Registrant and Morgan Guaranty year ended January 31, 1995,
Trust Company of New York Exhibit 10.10.
12.1 Computation of Ratio of Earnings Filed herewith electronically.
Available for Fixed Charges to
Fixed Charges
23.1 Independent Auditors' Consent Filed herewith electronically.
27.1 Financial Data Schedule Filed herewith electronically.
Exhibit 12.1
NORDSTROM CREDIT, INC.
Computation of Ratio of Earnings Available for
Fixed Charges to Fixed Charges
(Dollars in thousands)
Year ended January 31, 1996 1995 1994 1993 1992
- ---------------------- ------- ------- ------- ------- -------
Earnings before
income taxes $35,086 $32,045 $32,372 $29,321 $24,023
Fixed charges
(gross interest expense) 42,245 31,187 29,600 33,841 35,037
------- ------- ------- ------- -------
Earnings available for
fixed charges $77,331 $63,232 $61,972 $63,162 $59,060
======= ======= ======= ======= =======
Ratio of earnings available
for fixed charges to fixed
charges 1.83 2.03 2.09 1.87 1.69
======= ======= ======= ======= =======
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to Registration
Statement No. 33-55905 of Nordstrom Credit, Inc. on Form S-3 of our report
dated March 8, 1996, appearing in this Annual Report on Form 10-K of Nordstrom
Credit, Inc. for the year ended January 31, 1996.
DELOITTE & TOUCHE LLP
Seattle, Washington
March 29, 1996