<PAGE>
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, 1994
/ / 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 0-6074
Nordstrom, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Washington 91-0515058
_______________________________ __________________
(State or other jurisdiction of (IRS employer
incorporation or organization) Identification No.)
1501 Fifth Avenue, Seattle, Washington 98101
______________________________________________________
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 206-628-2111
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without 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. / /
1 of 16
<PAGE>
On March 22, 1994, 82,080,065 shares of common stock were outstanding, and the
aggregate market value of those shares (based upon the closing price as
reported by the NASDAQ) held by non-affiliates was approximately $2.1 billion.
Documents Incorporated by Reference:
Portions of Nordstrom, Inc. 1993 Annual Report to Shareholders
(Parts I and II)
Portions of Proxy Statement for 1994 Annual Meeting of Shareholders
(Part III)
2 of 16
<PAGE>
PART I
Item 1. Business.
- - ------------------
Nordstrom, Inc. (the "Company") was incorporated in the State of Washington in
1946 as successor to a retail shoe business started in 1901. Today, the
Company operates 53 large specialty stores and four smaller specialty stores
in Washington, Oregon, California, Utah, Alaska, Virginia, New Jersey,
Illinois, Maryland and Minnesota, selling a wide selection of apparel, shoes
and accessories for women, men and children.
The Company also operates eighteen clearance stores under the name "Nordstrom
Rack" which serve as outlets for clearance merchandise from the Company's
large specialty stores. The Racks also purchase merchandise directly from
manufacturers. The Racks are located in Washington, Oregon, California, Utah,
Virginia, Maryland, Pennsylvania and Illinois. The Company also operates
a men's specialty store in New York and leased shoe departments in 11
department stores in Hawaii. The Company commenced operations of its Direct
Sales division with the mailing of the first catalog at the end of 1993.
Over the next twelve to eighteen months, the Company will be involved in tests
of Interactive Television Shopping.
The Company regularly employs on a full or part-time basis an average of
approximately 33,000 employees. Due to the seasonal nature of the Company's
business, the number increased to approximately 40,000 employees in December.
The Company's business is highly competitive. Its stores compete with other
national, regional and local retail establishments within its operating areas
which carry similar lines of merchandise, including department stores,
specialty stores and boutiques. The Company believes the principal methods of
competing in its industry include customer service, value, fashion,
advertising, store location and depth of selection.
Certain other information required under Item 1 is contained within the
following sections of the Company's 1993 Annual Report to Shareholders, which
sections are incorporated by reference herein from Exhibit 13.1 of this
report:
Message to the Shareholders
Management Discussion and Analysis
Note 13 in Notes to Consolidated
Financial Statements
3 of 16
<PAGE>
Executive Officers of the Registrant
- - ------------------------------------
<TABLE>
<CAPTION>
Officer
Name Age Title Since Family Relationship
- - -------------------- --- ------------------ ------- --------------------
<S> <C> <C> <C> <C>
Jammie Baugh 40 Executive Vice 1990 None
President
Gail Cottle 42 Executive Vice 1985 None
President
Joseph V. Demarte 42 Vice President 1990 None
John A. Goesling 48 Executive Vice 1980 None
President and Treasurer
Jack Irving 49 Executive Vice 1980 None
President
Raymond A. Johnson 52 Co-President 1976 None
John A. McMillan 62 Co-Chairman of the 1969 Cousin by marriage of
Board of Directors Bruce A., James F.,
and John N. Nordstrom
Blake Nordstrom 33 Vice President 1991 Son of Bruce A.
Nordstrom
Bruce A. Nordstrom 60 Co-Chairman of the 1966 Cousin of James F.
Board of Directors and John N. Nordstrom
James A. Nordstrom 32 Vice President 1991 Son of John N.
Nordstrom
James F. Nordstrom 54 Co-Chairman of the 1969 Brother of John N.
Board of Directors Nordstrom
John N. Nordstrom 56 Co-Chairman of the 1966 Brother of James F.
Board of Directors Nordstrom
Robert T. Nunn 54 Executive Vice 1983 None
President
Cynthia C. Paur 43 Executive Vice 1983 None
President
John Walgamott 48 President of 1991 None
Nordstrom Credit, Inc.
and Nordstrom National
Credit Bank
John Whitacre 41 Co-President 1989 None
</TABLE>
All of the above people that have not been officers for the past five years
have been full-time employees of the Company during that period. The officers
are re-elected annually by the Board of Directors following each year's Annual
Meeting. Each officer is elected for a term of one year or until a successor
is elected and qualifies.
4 of 16
<PAGE>
Item 2. Properties.
- - --------------------
The following table summarizes at January 31, 1994 the number of stores owned
or operated by the Company and the percentage of total store area represented
by each listed category:
<TABLE>
<CAPTION>
Number of % of total store
stores square footage
--------- ----------------
<S> <C> <C>
Owned Stores 20 29%
Leased Stores 35 29
Owned on leased land 18 39
Partly owned & partly leased 1 3
--------- ----------------
74 100%
========= ================
</TABLE>
The Company also operates eight merchandise distribution centers, five of
which are owned and three of which are leased. The Company leases its
principal offices in Seattle, Washington, and owns an office building in the
Denver, Colorado metropolitan area which serves as the principal offices of
Nordstrom Credit, Inc. and Nordstrom National Credit Bank.
The Company operates 25 full-line stores, six clearance stores and two
distribution centers in California. Because of its high cost, the Company
does not carry earthquake insurance.
Certain other information required under this item is included in the
following section of the Company's 1993 Annual Report to Shareholders, which
section is incorporated by reference herein from Exhibit 13.1 of this report:
Retail Store Facilities
Item 3. Legal Proceedings.
- - --------------------------
The Company is not involved in any material pending legal proceedings, other
than routine litigation in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
- - ------------------------------------------------------------
None
5 of 16
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
- - ---------------------------------------------------------------------
The Company's Common Stock, without par value, is traded in the over-the-
counter market and is quoted daily by the NASDAQ. The approximate number of
holders of Common Stock as of March 22, 1994 was 71,500.
Certain other information required under this Item with respect to stock
prices and dividends is included in the following sections of the Company's
1993 Annual Report to Shareholders, which sections are incorporated by
reference herein from Exhibit 13.1 of this report:
Financial Highlights - Stock Trading
Consolidated Statements of Shareholders' Equity
Note 9 in Notes to Consolidated Financial Statements
Note 14 in Notes to Consolidated Financial Statements
Item 6. Selected Financial Data.
- - ---------------------------------
The information required under this item is included in the following section
of the Company's 1993 Annual Report to Shareholders, which section is
incorporated by reference herein from Exhibit 13.1 of this report:
Ten-Year Statistical Summary
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
- - ------------------------------------------------------------------------
The information required under this item is included in the following section
of the Company's 1993 Annual Report to Shareholders, which section is
incorporated by reference herein from Exhibit 13.1 of this report:
Management Discussion and Analysis
Item 8. Financial Statements and Supplementary Data.
- - -----------------------------------------------------
The information required under this item is included in the following sections
of the Company's 1993 Annual Report to Shareholders, which sections are
incorporated by reference herein from Exhibit 13.1 of this report:
Consolidated Statements of Earnings
Consolidated Balance Sheets
Consolidated Statements of Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditors' Report
6 of 16
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.
- - ------------------------------------------------------------
The information required under this item with respect to the Company's
Directors and compliance with Section 16(a) of the Exchange Act is included in
the following sections of the Company's Proxy Statement for its 1994 Annual
Meeting of Shareholders, which sections are incorporated by reference herein
and will be filed within 120 days after the end of the Company's fiscal year:
Election of Directors
Compliance with Section 16(a) of the Exchange Act of 1934
The information required under this item with respect to the Company's
Executive Officers is incorporated by reference from Part I, Item 1 of this
report under "Executive Officers of the Registrant".
Item 11. Executive Compensation.
- - --------------------------------
The information required under this item is included in the following sections
of the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders,
which sections are incorporated by reference herein and will be filed within
120 days after the end of the Company's fiscal year:
Compensation of Executive Officers in the Year Ended
January 31, 1994
Compensation and Stock Option Committee Report on Executive
Compensation
Stock Price Performance
Compensation of Directors
Compensation Committee Interlocks and Insider Participation
1993 Non-Employee Director Stock Incentive Plan (Effectiveness of the
Plan is subject to approval of the shareholders at the 1994 Annual
Meeting of Shareholders.)
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- - ------------------------------------------------------------------------
The information required under this item is included in the following section
of the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders,
which sections are incorporated by reference herein and will be filed within
120 days after the end of the Company's fiscal year:
Principal Shareholders
7 of 16
Item 13. Certain Relationships and Related Transactions.
- - --------------------------------------------------------
The information required under this item is included in the following sections
of the Company's Proxy Statement for its 1994 Annual Meeting of Shareholders,
which sections are incorporated by reference herein and will be filed within
120 days after the end of the Company's fiscal year:
Election of Directors
Transactions with Management
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- - --------------------------------------------------------------------------
(a)1. Financial Statements
--------------------
The following consolidated financial information and statements of
Nordstrom, Inc. and its subsidiaries and the Independent Auditors'
Report are incorporated by reference herein from Exhibit 13.1 of this
report:
Consolidated Statements of Earnings
Consolidated Balance Sheets
Consolidated Statements of Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a)2. Financial Statement Schedules
-----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Consent and Report on Schedules 12
V - Property, Buildings and Equipment 13
VI - Accumulated Depreciation and Amortization
of Property, Buildings and Equipment 14
VIII - Valuation and Qualifying Accounts 15
IX - Short-term Borrowings 16
</TABLE>
Other schedules for which provision is made in Regulation S-X are not
required, are inapplicable, or the information is included in the
Company's 1993 Annual Report to Shareholders as incorporated by
reference herein from Exhibit 13.1 of this report.
8 of 16
<PAGE>
(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, 1990, Exhibit A.
(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,
1992, Exhibit 3.2.
(4.1) The Indenture between Nordstrom Credit, Inc. (a wholly-owned
subsidiary of the Registrant) and First Interstate Bank of
Washington, N.A. 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 the Nordstrom Credit,
Inc. Annual Report on Form 10-K (SEC File No. 0-12994) for the
year ended January 31, 1991, Exhibit 4.2, respectively.
Securities authorized under each of any other long-term debt
instruments of the Company or its subsidiaries do not exceed 10%
of the consolidated total assets of the Company and its
subsidiaries. The Company will furnish a copy of any such long-
term debt instrument or agreement to the Commission upon request.
(10.1) Operating Agreement dated August 30, 1991 between Nordstrom
Credit, Inc. and Nordstrom National Credit Bank is hereby
incorporated by reference from the Nordstrom Credit, Inc.
Quarterly Report on Form 10-Q, as amended (SEC File No.
0-12994) for the quarter ended July 31, 1991, Exhibit 10.1.
(10.2) The 1987 Nordstrom Stock Option Plan is hereby incorporated by
reference from the Registrants' Proxy Statement for its 1987
Annual Meeting of Shareholders.
(10.3) The Nordstrom Supplemental Retirement Plan is hereby incorporated
by reference from the Registrant's Form 10-K for the year ended
January 31, 1992, Exhibit 10.3.
(10.4) The 1993 Non-Employee Director Stock Incentive Plan is filed
herein as an Exhibit. (Effectiveness of the Plan is subject to
approval of the shareholders at the 1994 Annual Meeting of
Shareholders.)
(13.1) The Company's 1993 Annual Report to Shareholders is filed herein
as an Exhibit.
(21.1) List of the Registrant's Subsidiaries is filed herein as an
Exhibit.
(23.1) Independent Auditors' consent is on page 12 of this report.
All other exhibits are omitted because they are not applicable, not
required, or because the required information is included in the
Company's 1993 Annual Report to Shareholders.
9 of 16
<PAGE>
(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.
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, INC.
(Registrant)
/s/ John A. Goesling
Date March 31, 1994 by __________________________________________
____________________ John A. Goesling
Executive Vice President and Treasurer
(Principal Accounting and Financial Officer)
10 of 16
<PAGE>
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.
Principal Executive Officers: Principal Accounting and
Financial Officer:
/s/ Raymond A. Johnson /s/ John A. Goesling
_______________________________ ________________________________
Raymond A. Johnson John A. Goesling
Co-President Executive Vice President
and Treasurer
/s/ John Whitacre
_______________________________
John Whitacre
Co-President
Directors:
/s/ D. Wayne Gittinger /s/ James F. Nordstrom
_______________________________ ________________________________
D. Wayne Gittinger James F. Nordstrom
Director Co-Chairman
/s/ John F. Harrigan /s/ John N. Nordstrom
_______________________________ ________________________________
John F. Harrigan John N. Nordstrom
Director Co-Chairman
/s/ Charles A. Lynch /s/ Alfred E. Osborne Jr.
_______________________________ ________________________________
Charles A. Lynch Alfred E. Osborne Jr.
Director Director
/s/ Ann D. McLaughlin /s/ William D. Ruckelshaus
_______________________________ ________________________________
Ann D. McLaughlin William D. Ruckelshaus
Director Director
/s/ John A. McMillan /s/ Malcolm T. Stamper
_______________________________ ________________________________
John A. McMillan Malcolm T. Stamper
Co-Chairman Director
/s/ Bruce A. Nordstrom /s/ Elizabeth Crownhart Vaughan
_______________________________ ________________________________
Bruce A. Nordstrom Elizabeth Crownhart Vaughan
Co-Chairman Director
Date March 31, 1994
___________________________
11 of 16
<PAGE>
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES
Shareholders and Board of Directors
Nordstrom, Inc.
We consent to the incorporation by reference in Registration Statements Nos.
33-18321 and 2-81695 of Nordstrom, Inc. on Form S-8 of our reports dated March
11, 1994 appearing in and incorporated by reference in this Annual Report on
Form 10-K of Nordstrom, Inc. and subsidiaries for the year ended January 31,
1994.
We have audited the consolidated financial statements of Nordstrom, Inc. and
subsidiaries as of January 31, 1994 and 1993, and for each of the three years
in the period ended January 31, 1994, and have issued our report thereon dated
March 11, 1994; such financial statements and report are included in your 1993
Annual Report to Shareholders and are incorporated herein by reference. Our
audits also included the consolidated financial statement schedules of
Nordstrom, Inc. and subsidiaries, listed in Item 14(a)2. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such consolidated financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly in all material respects the information set forth therein.
Deloitte & Touche
March 31, 1994
Seattle, Washington
12 of 16
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, BUILDINGS AND EQUIPMENT
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Balance
beginning Additions Retire- Reclassi- at end of
Description of period at cost ments fications period
- - ----------- ---------- --------- -------- --------- ----------
Year ended January 31, 1994:
<S> <C> <C> <C> <C> <C>
Land and land
improvements $ 40,806 $ 400 $ - $ 604 $ 41,810
Property leased under
capitalized leases 27,421 - - (4,500) 22,921
Buildings 370,878 8,242 25 2,894 381,989
Leasehold improvements 456,087 15,206 - - 471,293
Store fixtures and
equipment 472,759 46,966 9,938 1,002 510,789
Construction in
progress 17,123 53,697 - - 70,820
---------- -------- ------- ------- ----------
$1,385,074 $124,511 $ 9,963 $ - $1,499,622
========== ======== ======= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
Year ended January 31, 1993:
<S> <C> <C> <C> <C> <C>
Land and land
improvements $ 39,454 $ 1,665 $ 313 $ - $ 40,806
Property leased under
capitalized leases 29,826 - 2,405 - 27,421
Buildings 327,026 44,033 181 - 370,878
Leasehold improvements 452,359 4,035 307 - 456,087
Store fixtures and
equipment 424,509 58,352 10,102 - 472,759
Construction in
progress 54,046 (36,923) - - 17,123
---------- -------- ------- ------- ----------
$1,327,220 $ 71,162 $13,308 $ - $1,385,074
========== ======== ======= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
Year ended January 31, 1992:
<S> <C> <C> <C> <C> <C>
Land and land
improvements $ 38,772 $ 1,296 $ 614 $ - $ 39,454
Property leased under
capitalized leases 29,826 - - - 29,826
Buildings 302,672 24,360 6 - 327,026
Leasehold improvements 370,835 81,524 - - 452,359
Store fixtures and
equipment 347,799 80,262 3,552 - 424,509
Construction in
progress 94,965 (40,919) - - 54,046
---------- -------- ------- ------- ----------
$1,184,869 $146,523 $ 4,172 $ - $1,327,220
========== ======== ======= ======= ==========
</TABLE>
13 of 16
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, BUILDINGS AND EQUIPMENT
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Balance
beginning costs and Retire- Reclassi- at end of
Description of period expenses ments fications period
- - ----------- ---------- ---------- ------- --------- ---------
Year ended January 31, 1994:
<S> <C> <C> <C> <C> <C>
Land improvements $ 6,024 $ 1,059 $ (2) $ (133) $ 7,218
Property leased under
capitalized leases 14,055 830 - 2,193 12,692
Buildings 119,502 20,148 32 (1,058) 140,676
Leasehold improvements 103,316 21,973 19 - 125,270
Store fixtures and
equipment 318,035 58,933 9,800 (1,002) 368,170
-------- -------- ------- -------- --------
$560,932 $102,943 $ 9,849 $ - $654,026
======== ======== ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Year ended January 31, 1993:
<S> <C> <C> <C> <C> <C>
Land improvements $ 5,103 $ 959 $ 38 $ - $ 6,024
Property leased under
capitalized leases 15,066 903 1,914 - 14,055
Buildings 100,081 19,569 148 - 119,502
Leasehold improvements 83,378 20,241 303 - 103,316
Store fixtures and
equipment 267,188 60,572 9,725 - 318,035
-------- -------- ------- -------- --------
$470,816 $102,244 $12,128 $ - $560,932
======== ======== ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Year ended January 31, 1992:
<S> <C> <C> <C> <C> <C>
Land improvements $ 4,177 $ 926 $ - $ - $ 5,103
Property leased under
capitalized leases 14,086 980 - - 15,066
Buildings 81,933 18,153 5 - 100,081
Leasehold improvements 65,026 18,352 - - 83,378
Store fixtures and
equipment 213,456 57,137 3,405 - 267,188
-------- -------- ------ -------- --------
$378,678 $ 95,548 $3,410 $ - $470,816
======== ======== ====== ======== ========
</TABLE>
14 of 16
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- ---------- ---------- ---------- ---------
Additions Deductions
---------- ----------
Account
Balance at Charged to write-offs Balance
beginning costs and net of at end of
Description of period expenses recoveries period
- - ----------- ---------- ---------- ---------- ---------
Allowance for doubtful accounts:
Year ended:
<S> <C> <C> <C> <C>
January 31, 1994 $23,969 $25,713 $26,537 $23,145
January 31, 1993 $24,192 $29,469 $29,692 $23,969
January 31, 1992 $19,635 $33,235 $28,678 $24,192
</TABLE>
15 of 16
<PAGE>
NORDSTROM INC. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Weighted
Maximum Average average
Category of Weighted amount amount interest
aggregate Balance average outstanding outstanding rate
short-term at end of interest during the during the during
borrowings period rate period period period
- - ---------- --------- -------- ----------- ----------- --------
(A) (B) (C)
<S> <C> <C> <C> <C> <C>
January 31, 1994
Notes payable $25,000 3.0% $ 55,000 $ 26,479 3.1%
to banks
Commercial paper 15,337 3.4 92,023 50,300 3.2
January 31, 1993
Notes payable $25,000 3.0% $125,000 $ 66,139 3.8%
to banks
Commercial paper 13,319 3.5 136,038 75,840 3.7
January 31, 1992
Notes payable $50,000 4.1% $110,000 $ 55,710 5.7%
to banks
Commercial paper 84,735 4.1 184,500 128,112 5.7
<FN>
(A) The notes payable to banks have maturities of up to six months or on
demand. Notes payable to holders of commercial paper generally have
maturities ranging from one day to two months.
(B) Average amount outstanding during the period is computed by dividing the
total of daily outstanding principal balances by the number of days in the
period.
(C) Weighted average interest rate during the period is computed by dividing
the actual short-term interest expense by the average short-term
borrowings outstanding.
</TABLE>
16 of 16
<PAGE>
NORDSTROM INC. AND SUBSIDIARIES
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Method of Filing
- - ------- ----------------
<C> <S> <C>
3.1 Articles of Incorporation Incorporated by reference
from Form 10-K for the year
ended January 31, 1990.
3.2 By-laws Incorporated by reference
from Form 10-K for the year
ended January 31, 1992.
4.1 Indenture between Nordstrom, Credit, Incorporated by reference
Inc. and First Interstate Bank of from Registration
Washington, the First Supplement, No. 33-3765, Registration
the Second Supplement and the Third No. 33-19743, Registration
Supplement No. 33-29193 and the
Nordstrom Credit, Inc.
Annual Report on Form 10-K
for the year ended January
31, 1991.
10.1 Operating Agreement between Nordstrom, Incorporated by reference
Credit, Inc. and Nordstrom National from the Nordstrom Credit,
Credit Bank Inc. Quarterly Report on
Form 10-Q, as amended for
the quarter ended July 31,
1991.
10.2 1987 Stock Option Plan Incorporated by reference
from the Proxy Statement
for the 1987 Annual Meeting
of Shareholders.
10.3 Supplemental Retirement Plan Incorporated by reference
from Form 10-K for the year
ended January 31, 1992.
10.4 1993 Non-Employee Director Stock
Incentive Plan Filed herewith electronically
13.1 1993 Annual Report to Shareholders Filed herewith electronically
21.1 Subsidiaries of the Registrant Filed herewith electronically
23.1 Independent Auditors' consent Filed herewith electronically
</TABLE>
<PAGE>
EXHIBIT 10.4
NORDSTROM, INC. AND SUBSIDIARIES
1993 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
1. Purpose. The purposes of the 1993 Non-Employee Director Stock Incentive
Plan (the "Plan") are to attract and retain well-qualified persons for service
as directors of Nordstrom, Inc. (the "Company"), to provide directors through
the payment of an incentive payable in shares of the Company's Common Stock,
without par value ("Common Stock"), with the opportunity to increase their
proprietary interest in the Company, and thereby to increase their personal
interest in the Company's continued success.
2. Administration. Responsibility and authority to administer and
interpret the provisions of the Plan shall be conferred upon the Compensation
and Stock Option Committee ("Committee").
The Committee may employ attorneys, consultants, accountants or other
persons and the Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All usual and reasonable expenses of the Committee shall be paid by the
Company. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon all recipients who
have received awards, the Company and other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretations taken or made in good faith with respect to the Plan or awards
made hereunder, and all members of the Committee shall be fully indemnified
and protected by the Company in respect of any action, determination or
interpretation.
3. Eligibility. All directors of the Company who are neither full-time
employees of the Company nor officers of the Company shall be participants
in the Plan.
4. Awards. Awards under the Plan shall consist of two parts, a stock award
(the "Stock Award") and a cash award (the "Tax Gross Up") intended to offset
the federal income tax liability attributable to the Stock Award. The Stock
Award and the Tax Gross Up shall be payable in stock and cash as provided
hereunder.
Within thirty (30) days after each annual meeting of shareholders of the
Company during the term hereof, the Company shall cause to be issued to each
person who is an eligible director immediately following the annual meeting
that number of full shares of Common Stock (rounded to the nearest whole
share) determined by dividing $10,000 by the mean of the closing bid and ask
prices of a share of Common Stock as of the date of the annual meeting, or, if
no sale of Common Stock has been recorded on that date, then on the next
preceding date on which a sale was made (the "Fair Market Value").
Concurrently with the issuance of each Stock Award, the Company shall
deliver to each eligible director a cash payment of $4,000 as the Tax Gross
Up.
<PAGE>
No payment will be required from the director upon the issuance or delivery
of a Stock Award or Tax Gross Up, except that any amount necessary to satisfy
applicable federal, state or local tax requirements shall be withheld or paid
promptly upon notification of the amount due and prior to or concurrently
with issuance of a certificate representing a Stock Award; provided that
notwithstanding anything contained herein to the contrary, the Committee may
accept stock received in connection with the Stock Award being taxed or
otherwise previously acquired in satisfaction of any withholding requirements.
5. Terms and Conditions. Up to 25,000 shares of Common Stock may be issued
from authorized shares of the Company pursuant to the Plan. Shares of Common
Stock issued pursuant to the Plan shall be from authorized but unissued
shares. To the extent the shares are not registered under the Securities Act
of 1933, as amended (the "Act"), they may not be sold, assigned, transferred
or otherwise disposed of in the absence of an effective registration statement
covering the shares, or an available exemption under the Act.
A director may not sell or otherwise transfer shares issued as a Stock Award
under the Plan for a period of six (6) months from the date of the award.
The Committee shall appropriately adjust the number of shares for which
awards may be granted pursuant to the Plan in the event of reorganization,
recapitalization, stock split, reverse stock split, stock dividend, exchange
or combination of shares, merger, consolidation, rights offering, or any
change in capitalization of the Company.
6. Amendment or Discontinuance. The Board of Directors of the Company may,
at any time, amend, rescind or terminate the Plan, as it shall deem advisable;
provided, however, that (i) no change may be made in any Stock Award or Tax
Gross Up previously made under the Plan which would impair the recipients'
rights without their consent; (ii) no amendment to the Plan may be made
without approval of the Company's shareholders if the effect of the amendment
would be to: (a) materially increase the number of shares reserved for
issuance hereunder or benefits accruing to participants under the Plan, (b)
materially change the requirements for eligibility under Section 3 hereof, or
(c) materially modify the method for determining the number of shares awarded
under Section 4 hereof, except that any such increase or modification that
results from adjustments authorized by the last paragraph of Section 5 shall
not require such approval; and (iii) no amendment may be made to the Plan
within six months of a prior amendment, except as required for compliance
with the Internal Revenue Code of 1986 or the rules thereunder.
7. Effective Date and Term of Plan. The Plan shall become effective as of
May 17, 1993 and shall remain in effect until December 31, 2002. Stock Awards
granted prior to termination of the Plan, shall, notwithstanding termination
of the Plan, continue to be effective and shall be governed by the Plan.
8. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the state of Washington
pertaining to contracts made and to be performed wholly within such
jurisdiction.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 1
About the Company
Nordstrom has grown from its origins as a small shoe store, to become one of
the nation's leading fashion specialty retailers, offering a wide variety of
fine quality apparel, shoes and accessories for women, men and children. Now
in its 93rd year, Nordstrom operates 52 large specialty stores in Washington,
Oregon, California, Utah, Alaska, Virginia, Maryland, New Jersey, Illinois and
Minnesota, plus four smaller specialty stores, 17 clearance and off-price
stores, a men's wear boutique in New York City, and leased shoe departments in
11 department stores in Hawaii. Currently led by the third generation of the
Nordstrom family, the Company remains committed to its founding principles of
quality, value, selection and service.
<PAGE>
2 NORDSTROM, INC. AND SUBSIDIARIES
Table of Contents
3 Financial Highlights
4 Message to the Shareholders
5 Management Discussion & Analysis
9 Consolidated Statements of Earnings
10 Consolidated Balance Sheets
11 Consolidated Statements of Shareholders' Equity
12 Consolidated Statements of Cash Flows
13 Notes to Consolidated Financial Statements
22 Report of Management
23 Independent Auditors' Report
24 Ten-Year Statistical Summary
26 Officers, Directors and Committees
30 Retail Store Facilities
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 3
Financial Highlights
<TABLE>
<CAPTION>
Dollars in thousands except per share amounts
Fiscal Year 1993 1992 % Change
- - ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $3,589,938 $3,421,979 +4.9
Earnings before income taxes 230,918 222,119 +4.0
Net earnings 140,418 136,619 +2.8
Net earnings per share 1.71 1.67 +2.4
Cash dividends paid per share .34 .32 +6.3
</TABLE>
Stock Trading
<TABLE>
<CAPTION>
Fiscal Year 1993 Fiscal Year 1992
- - --------------------------------------------------------------------------
High Low High Low
<S> <C> <C> <C> <C>
1st Quarter 43 1/2 27 3/4 42 3/4 30
2nd Quarter 32 1/4 25 1/4 35 1/4 25 1/2
3rd Quarter 35 3/4 26 1/4 35 26 1/2
4th Quarter 36 1/2 31 40 1/2 30 5/8
</TABLE>
Nordstrom, Inc. common stock is traded over-the-counter and quoted daily in
leading financial publications. NASDAQ Symbol -- Nobe.
Net Sales
The vertical bar graph shows the growth in net sales for the past ten years.
Dollars are in millions. In fiscal year 1993, net sales were $3,590; 1992-
$3,422; 1991-$3,180; 1990-$2,894; 1989-$2,671; 1988-$2,328; 1987-$1,920; 1986-
$1,630; 1985-$1,302 and 1984-$959.
Net Earnings
The vertical bar graph compares net earnings for the past ten years.
Beginning with the most recent fiscal year on the left, net earnings (dollars
in millions) were as follows: 1993-$140.4; 1992-$136.6; 1991-$135.8; 1990-
$115.8; 1989-$114.9; 1988-$123.3; 1987-$92.7; 1986-$72.9; 1985-$50.1 and 1984-
$40.7.
<PAGE>
4 NORDSTROM, INC. AND SUBSIDIARIES
Message to the Shareholders
Our sales totaled $3.59 billion in 1993 compared with $3.42 billion in 1992.
Earnings for 1993 were $140.4 million compared with $136.6 million in 1992.
Our full-line Nordstrom stores previously scheduled to open in 1993 were
postponed by developers until 1994 or 1995 due to financing or permit delays,
but we did open a Nordstrom Factory Direct store in Philadelphia on August 5
and a Facconable store on 54th Street and 5th Avenue in New York City on
October 1 of 1993.
We are now back on a more normal expansion schedule for 1994 through 1996.
Annapolis Mall, Annapolis, Maryland; Santa Anita Mall, Arcadia, California;
Old Orchard Mall, Skokie, Illinois; and a move to an expanded Washington
Square store in Southwest Portland, Oregon are all Nordstrom full-line stores
opening this year. The first phase of our Bellevue, Washington expansion
opens this fall as well.
Store openings for 1995 include Woodfield Mall, Schaumburg, Illinois;
Westchester Mall, White Plains, New York; Short Hills Mall, Millburn, New
Jersey; Circle Centre, Indianapolis, Indiana; and the final phase of the
Bellevue Square expansion. In 1996 we expect to open new stores in Dallas,
Denver, Philadelphia and Detroit.
We also welcomed our Direct Sales Division's first catalog on January 27.
Telephone answering service is performed by the Nordstrom Direct Sales team in
Seattle, and merchandise is shipped from our Memphis, Tennessee warehouse via
Federal Express. Early results are very encouraging for this first catalog.
Additional catalog mailings will follow about every other month. As we
previously announced, our Direct Sales Division will be involved in tests of
Interactive Television Shopping over the next 12 to 18 months.
We believe our Company is moving toward a better 1994 for several reasons:
1) Our 4th quarter was the strongest of the past year, and outperformed a good
4th quarter in 1992.
2) Our business in California appears to be recovering well in spite of the
earthquake, fires, floods and droughts that have recently affected business in
that region.
3) Our sales in our newer markets are most encouraging, with Chicago,
Washington, D.C. and New Jersey all doing well.
4) The national economy is improved and our customers seem to be feeling
better about the future.
As we move through the '90s, you can be sure your Company's policies will
continue to focus on improved customer service, high quality merchandise, wide
selection and great value, to better serve more customers than ever.
John A. McMillan
Bruce A. Nordstrom
James F. Nordstrom
John N. Nordstrom
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 5
Management Discussion and Analysis
The following discussion and analysis gives a more detailed review of the past
three years, as well as additional information on future commitments and
trends. This discussion and analysis should be read in conjunction with the
basic consolidated financial statements and the Ten-Year Statistical Summary.
Sales
Sales have increased to record levels in each of the past three years. As
shown below, the sales increases are primarily attributable to additional
stores.
<TABLE>
<CAPTION>
Fiscal Year 1993 1992 1991
- - --------------------------------------------------------------------------
<S> <C> <C> <C>
Additional sales in comparable stores
(open at least fourteen months) 2.7% 1.4% 1.4%
Sales in new stores 2.2% 6.2% 8.5%
---- ---- ----
Total percentage increase 4.9% 7.6% 9.9%
==== ==== ====
</TABLE>
During the last three years, there has been very modest growth in overall
comparable stores' sales. Consumers have been more cautionary in their
spending patterns in nearly all regions of the Company's operations during
this period of time. Many consumers have reacted to various economic and
political issues by slowing or reducing purchases. This trend has been more
noticeable in California where, after many years of sustained high growth in
sales, comparable sales have decreased at some stores. In addition, sales of
women's apparel in 1993 were disappointing. While other categories of
merchandise showed improving sales trends, women's apparel sales decreased
slightly in comparable stores because fashion trends were not widely accepted.
This phenomenon was experienced by many other retailers as well.
It generally takes new stores several years to reach the high sales
productivity of the Company's average store, due to the established customer
base and traffic patterns of the Company's more mature stores. As a result,
sales growth from new stores during the last three years has increased at a
somewhat lower rate than the increase in average store square footage each
year.
While management believes that some portion of the increase in merchandise
sales is due to inflation, it is difficult to measure because of changes in
merchandise styles and selections. The change in the retail prices of
apparel, shoes and accessories as measured by the Bureau of Labor Statistics
on an overall basis was 3% for 1991, 1% for 1992 and 1% for 1993. Management
believes that these statistics are the best available measure of the effect of
inflation on the Company's selling prices.
Percentage of 1993 Sales by Merchandise Category
The pie chart depicts each merchandise category and the percent to total
sales. Clockwise: Shoes - 20%; Men's Apparel and Furnishings - 16%;
Children's Apparel and Accessories - 4%; Other - 2%; Women's Apparel - 38% and
Women's Accessories - 20%. The caption below the graph reads, "Sales by major
merchandise category have changed only slightly over the past several years."
<PAGE>
6 NORDSTROM, INC. AND SUBSIDIARIES
Management Discussion and Analysis
Costs and Expenses
As a result of increased sales, total costs and expenses have increased in
each year. As a percentage of sales, total costs and expenses were 93.2% in
1991, 93.5% in 1992 and 93.6% in 1993. These percentages are higher than the
1980s because of the minimal rate of growth in comparable store sales. Unless
otherwise indicated, the changes discussed below are stated as a percentage of
sales as shown on page 9.
Cost of sales and related buying and occupancy costs fluctuate primarily
because of changes in the merchandise gross margin. During 1991 and 1992,
the merchandise gross margin improved because inventory levels were well
controlled and more emphasis was placed on merchandise price points. In 1993,
the merchandise gross margin decreased because of the softness of demand for
women's apparel as noted earlier. Buying costs increased in 1992 and 1993, as
the Company spent more to develop its own merchandise brands and to develop
and implement a new inventory management system. These costs are expected
to further increase in 1994.
Selling, general and administrative expenses increased in 1991 and 1992 as
sales growth slowed. Salaries, wages, workers' compensation claims and
medical plan benefits increased in comparable stores at a faster rate than
sales. In addition, bad debts increased in 1991 as a result of the effects of
the recession, with a high proportion of the increase occurring in California.
In 1992, management implemented programs to control these expenses, and as a
result, the rate of growth of these expenses has slowed. In 1993, selling,
general and administrative expenses decreased primarily because of a reduction
in bad debts.
Interest expense decreased in 1991 because the Company refinanced long-term
debt during the prior two years at lower interest rates, and short-term
interest rates declined. In 1992 and 1993, interest expense decreased because
of lower short-term interest rates and reductions in debt outstanding.
Other income in the fourth quarter of 1992 was reduced by a charge of $6.6
million ($.05 per share after income taxes) for plaintiffs' legal fees in
connection with the settlement of a class action lawsuit. The Company
established a reserve in 1989 for potential wage claims alleged in that same
lawsuit. The Company has now paid nearly all resulting claims, and
accordingly has adjusted the reserve to reflect actual claims paid. This
resulted in an increase in other income in the fourth quarter of 1993 of $4.5
million ($.03 per share after income taxes). Also, in the fourth quarter of
1993, other income was reduced by $5 million ($.04 per share after income
taxes) for estimated expenses and property losses resulting from the
earthquake in Southern California. The Company does not carry earthquake
insurance because of its high cost.
Income Taxes
The provision for income taxes increased in 1991 and 1992 as a percentage of
earnings before income taxes because of a reduction in deferred tax credits.
In 1993, the provision increased because of the increase in the Federal income
tax rate.
Net Earnings
Earnings growth over the past several years has been difficult to achieve
because of the effect of the recession on consumers' purchasing power and the
promotional environment in the retail industry.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 7
Management Discussion and Analysis
Liquidity and Capital Resources
During the past three years, cash provided by operating activities has
exceeded cash used in investing activities as shown on page 12. The Company
has used this excess cash flow to reduce total debt outstanding. This
situation will be reversed starting in 1994 as the Company increases spending
on new store construction.
The Company's operating working capital (net working capital less short-term
investments plus notes payable and the current portion of long-term debt) has
fluctuated as shown below:
<TABLE>
<CAPTION>
Fiscal year 1993 1992 1991
- - -----------------------------------------------------------------------------
<S> <C> <C> <C>
Operating working capital (in thousands) $745,040 $765,893 $758,581
Percentage change from prior year (2.7%) 1.0% 11.8%
-------- -------- --------
Net sales/average operating working capital 4.8 4.5 4.4
======== ======== ========
</TABLE>
The Company believes that operating working capital is a more appropriate
measure of the Company's on-going working capital requirements than net
working capital because it eliminates the effect of changes in the levels of
short-term investments and borrowings. These levels can vary each year
depending on financing activities.
In 1991, operating working capital increased at a faster rate than sales. The
primary cause for this increase relates to the increase in prepaid expenses
arising from changes in the timing of deductions for income tax purposes.
Operating working capital increased at a slower rate in 1992 and decreased in
1993 because of reduced customer accounts receivable. Credit sales on the
Company's credit card have decreased, reflecting more cautious use of credit
by consumers in general and increased competition from third-party cards. The
Company intends to issue its own VISA card in 1994 to counteract this trend.
Investing and Operating Cash Flows
The vertical bar graph compares cash provided by operating activities and cash
used in investing activities for each year, for the past ten years. Dollars
are in millions.
<TABLE>
<CAPTION>
Investing Operating
Year activities activities
- - ---- ---------- ----------
<S> <C> <C>
1993 $132.7 $262.1
1992 $ 71.9 $235.6
1991 $147.2 $154.0
1990 $200.7 $148.1
1989 $168.7 $122.2
1988 $153.4 $ 46.0
1987 $128.3 $ 87.7
1986 $ 69.8 $115.0
1985 $120.9 $ (3.5)
1984 $134.5 $ 26.7
</TABLE>
<PAGE>
8 NORDSTROM, INC. AND SUBSIDIARIES
Management Discussion and Analysis
Liquidity and Capital Resources (continued)
The Company has spent $347 million during the last three years to add new
stores and facilities and to improve existing stores and facilities. Over 1.6
million square feet of selling space has been added during this time period,
representing an increase of 21%. Most of the new stores have been constructed
by the Company on land that it owns or leases under long-term agreements, thus
providing a strong basis for future operations.
The rate of growth in square footage will increase in 1994 as compared to
1993. The Company plans to spend over $750 million on capital projects during
the next three years, with over $100 million allocated to the refurbishment of
existing stores. Although the Company has made commitments for stores to be
opening in 1994 and beyond, it is possible that some stores may not be opened
as scheduled because of environmental and land use regulations and the
difficulties encountered by shopping center developers in securing financing.
The anticipated growth of the Company's operations will require some external
capital in the next three years. Most of these external capital requirements
will be funded with additional long- and short-term debt issued by the
Company's captive finance subsidiary.
The Company's capital base has expanded over the last three years. At the end
of 1993, the Company's capital totaled $1,645 million. Because the Company
has experienced strong positive cash flows, outstanding debt has decreased in
total and as a percentage of total capital. The percentage of debt to total
capital is lower than it has been in over 10 years. Management believes that
the expansion of the Company's operations over the next several years will not
significantly increase its debt to capital percentage. Management also
believes that the Company's current financial strength provides the resources
necessary to maintain its existing stores and the flexibility to take
advantage of new store opportunities.
Square Footage by Market Area at end of 1993
The pie chart shows the percent of total square feet in each region and also
gives the number of square for that region. Clockwise: Northern California,
20.7%, 1,922,000; Washington, 13.5%, 1,251,000; Capital, 11.5%, 1,067,000;
Oregon, 8.0%, 742,000; Northeast, 7.8%, 722,000; Midwest, 5.3%, 489,000; Utah,
3.8%, 357,000; Place Two and Clearance, 1.1%, 99,000; Alaska, 1.0%, 97,000 and
Southern California, 27.3%, 2,536,000.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 9
Consolidated Statements of Earnings
<TABLE>
<CAPTION>
Dollars in thousands except per share amounts
% of % of % of
Year ended January 31, 1994 Sales 1993 Sales 1992 Sales
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $3,589,938 100.0 $3,421,979 100.0 $3,179,820 100.0
---------- ----- ---------- ----- ---------- -----
Costs and expenses:
Cost of sales and related
buying and occupancy 2,469,304 68.8 2,339,107 68.3 2,169,437 68.2
Selling, general and
administrative 940,579 26.2 902,083 26.4 831,505 26.2
Interest, net 37,646 1.1 44,810 1.3 49,106 1.5
Service charge income
and other, net (88,509) (2.5) (86,140) (2.5) (87,443) (2.7)
---------- ----- ---------- ----- ---------- -----
Total costs and expenses 3,359,020 93.6 3,199,860 93.5 2,962,605 93.2
---------- ----- ---------- ----- ---------- -----
Earnings before income taxes 230,918 6.4 222,119 6.5 217,215 6.8
Income taxes 90,500 2.5 85,500 2.5 81,400 2.5
---------- ----- ---------- ----- ---------- -----
Net earnings $ 140,418 3.9 $ 136,619 4.0 $ 135,815 4.3
========== ===== ========== ===== ========== =====
Net earnings per share $ 1.71 $ 1.67 $ 1.66
========== ========== ==========
Cash dividends paid per share $ .34 $ .32 $ .31
========== ========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
10 NORDSTROM, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Dollars in thousands
January 31, 1994 1993
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 91,222 $ 29,136
Accounts receivable, net 586,441 603,198
Merchandise inventories 585,602 536,739
Prepaid income taxes and other 51,649 50,771
---------- ----------
Total current assets 1,314,914 1,219,844
Property, buildings and equipment, net 845,596 824,142
Other assets 16,971 9,184
---------- ----------
Total assets $2,177,481 $2,053,170
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 40,337 $ 38,319
Accounts payable 264,055 220,176
Accrued salaries, wages and taxes 156,947 158,028
Accrued expenses 35,994 31,141
Accrued income taxes 27,988 22,216
Current portion of long-term debt 102,164 41,316
---------- ----------
Total current liabilities 627,485 511,196
Long-term debt 336,410 440,629
Deferred income taxes 47,082 49,314
Shareholders' equity 1,166,504 1,052,031
---------- ----------
Total liabilities and shareholders' equity $2,177,481 $2,053,170
========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 11
Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Dollars in thousands except per share amounts
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock
Authorized 250,000,000 shares; issued and outstanding
82,059,128, 81,974,797 and 81,844,227 shares
Balance at beginning of year $ 155,439 $ 153,055 $ 150,699
Issuance of common stock 1,935 2,384 2,356
---------- ---------- ----------
Balance at end of year 157,374 155,439 153,055
---------- -------- ----------
Retained Earnings
Balance at beginning of year 896,592 786,176 675,711
Net earnings 140,418 136,619 135,815
Cash dividends paid ($.34, $.32 and $.31 per share) (27,880) (26,203) (25,350)
---------- ---------- ----------
Balance at end of year 1,009,130 896,592 786,176
---------- ---------- ----------
Total shareholders' equity $1,166,504 $1,052,031 $ 939,231
========== ========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
12 NORDSTROM, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Dollars in thousands
Year ended January 31, 1994 1993 1992
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net earnings $140,418 $136,619 $135,815
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 103,466 102,763 96,034
Change in:
Accounts receivable, net 16,757 5,029 (32,719)
Merchandise inventories (48,863) (30,107) (58,288)
Prepaid income taxes and other (878) (2,643) (6,263)
Accounts payable 43,879 3,744 12,166
Accrued salaries, wages and taxes (1,081) 12,236 17,095
Accrued expenses 4,853 (600) (2,927)
Income tax liabilities 3,540 8,586 (6,926)
-------- -------- --------
Net cash provided by operating activities 262,091 235,627 153,987
-------- -------- --------
Investing Activities
Additions to property, buildings and equipment, net (124,401) (69,982) (145,761)
Other, net (8,306) (1,870) (1,393)
-------- -------- --------
Net cash used in investing activities (132,707) (71,852) (147,154)
-------- -------- --------
Financing Activities
Increase (decrease) in notes payable 2,018 (96,416) (14,771)
Principal payments on long-term debt (43,371) (29,055) (85,647)
Proceeds from issuance of common stock 1,935 2,384 2,356
Cash dividends paid (27,880) (26,203) (25,350)
Proceeds from issuance of long-term debt, net -- - 106,568
-------- -------- --------
Net cash used in financing activities (67,298) (149,290) (16,844)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 62,086 14,485 (10,011)
Cash and cash equivalents at beginning of year 29,136 14,651 24,662
-------- -------- --------
Cash and cash equivalents at end of year $ 91,222 $ 29,136 $ 14,651
======== ======== ========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 13
Notes to Consolidated Financial Statements
Dollars in thousands except per share amounts
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The Consolidated Financial Statements include the
accounts of Nordstrom, Inc. and its subsidiaries. All significant
intercompany transactions and accounts are eliminated in consolidation.
Merchandise Inventories: Merchandise inventories are stated at the lower of
cost (first-in, first-out basis) or market, using the retail method.
Property, Buildings and Equipment: Straight-line and accelerated methods are
applied in the calculation of depreciation and amortization. Accelerated
methods are generally applied for income tax purposes.
Lives used for calculating depreciation and amortization rates for the
principal asset classifications are as follows: buildings, 10 to 50 years;
store fixtures and equipment, three to 15 years; leasehold improvements and
property leased under capitalized leases, life of lease or applicable shorter
period.
Store Preopening Costs: Store opening and preopening costs are charged to
expense when incurred.
Capitalization of Interest: The interest carrying costs of facilities being
constructed are capitalized during their construction period based on the
Company's weighted average borrowing rate.
Income Taxes: The Company adopted Statement of Financial Accounting Standards
No. 109 in 1993. This statement supersedes Accounting Principles Board
Opinion No. 11, which the Company previously followed. Implementation of this
standard had no significant impact on the Company's results of operations.
Earnings per Share: Earnings per share are computed on the basis of the
weighted average number of common shares outstanding during the year. Average
shares outstanding were 82,003,407, 81,892,829 and 81,779,997 in 1993, 1992
and 1991.
Cash Equivalents: 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.
Customer Accounts Receivable: In accordance with trade practices,
installments maturing in more than one year or deferred payment accounts
receivable are included in current assets.
Cash Management: The Company's cash management system provides for the
reimbursement of all major bank disbursement accounts on a daily basis.
Accounts payable at January 31, 1994 and 1993 include $15,817 and $2,643 of
checks drawn in excess of cash balances not yet presented for payment.
<PAGE>
14 NORDSTROM, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Note 1 continued)
Post-Employment Benefits: The Company provides post-retirement medical
benefits for a limited group of employees. In 1993, the Company adopted
Statement of Financial Accounting Standards No. 106, which requires accrual of
these costs over the period of employment. These costs were previously
expensed when paid.
In addition, the Company provides continuation of medical benefits, workers
compensation and disability benefits to certain former or inactive employees.
In 1993, the Company adopted Statement of Financial Accounting Standards No.
112, which requires full accrual of these costs by the date the employees'
services terminate or suspend. These costs were previously expensed on an
incurred-claim basis.
Implementation of these standards had no material impact on the Company's
results of operations.
Reclassifications: Certain reclassifications have been made for consistent
presentation.
Note 2: EMPLOYEE BENEFITS
The Company provides a profit sharing plan for employees. The plan is
non-contributory except for employee contributions made underSection 401(k) of
the Internal Revenue Code. Under this provision, the Company provides
matching contributions up to a stipulated percentage of employee
contributions. The plan is fully funded by the Company, and the contribution
is established each year by the Board of Directors. The Company contribution
was $35,500, $34,000 and $31,500 for 1993, 1992 and 1991.
Note 3: SUPPLEMENTARY STATEMENTS OF EARNINGS INFORMATION
The following amounts are included in the Company's expenses:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Payroll taxes $65,752 $63,083 $55,872
Other taxes (excluding
income taxes) 18,549 16,010 16,880
Advertising costs 60,112 58,424 55,320
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 15
Notes to Consolidated Financial Statements
Note 4: INTEREST EXPENSE
The components of interest expense are as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Nordstrom, Inc.
Short-term debt $ 46 $ 799 $ 2,756
Long-term debt 12,830 14,084 18,880
Nordstrom Credit, Inc.
Short-term debt 2,361 4,474 7,753
Long-term debt 25,543 28,906 27,105
------- ------- -------
Total interest incurred 40,780 48,263 56,494
Less: Interest income (1,624) (1,161) (1,680)
Capitalized interest (1,510) (2,292) (5,708)
------- ------- -------
Interest, net $37,646 $44,810 $49,106
======= ======= =======
</TABLE>
Note 5: INCOME TAXES
Income taxes consist of the following:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
-----------------------------------------------------------------------
<S> <C> <C> <C>
Current income taxes:
Federal $77,231 $71,181 $70,561
State and local 16,149 14,931 17,034
------- ------- -------
Total current income taxes 93,380 86,112 87,595
------- ------- -------
Deferred income taxes:
Current (648) (3,588) (7,135)
Non-current (2,232) 2,976 940
------- ------- -------
Total deferred income taxes (2,880) (612) (6,195)
------- ------- -------
Total income taxes $90,500 $85,500 $81,400
======= ======= =======
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 16
Notes to Consolidated Financial Statements
(Note 5 continued)
A reconciliation of the statutory Federal income tax rate with the
effective tax rate is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.00% 34.00% 34.00%
State and local income taxes, net
of Federal income taxes 4.41 4.38 4.35
Other, net (0.21) 0.11 (0.88)
------- ------- -------
Effective tax rate 39.20% 38.49% 37.47%
======= ======= =======
Deferred income taxes result from temporary differences in the timing of
recognition of revenue and expenses for tax and financial statement
reporting as follows:
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
Excess tax basis depreciation $2,557 $2,342 $1,687
Accrued expenses (2,850) (3,039) (5,808)
Other (2,587) 85 (2,074)
------- ------- -------
Total deferred income taxes ($2,880) ($ 612) ($6,195)
======= ======= =======
</TABLE>
Note 6: ACCOUNTS RECEIVABLE
The components of accounts receivable are as follows:
<TABLE>
<CAPTION>
January 31, 1994 1993
- - ------------------------------------------------------------------------
<S> <C> <C>
Customers $588,296 $608,348
Other 21,290 18,819
Allowance for doubtful accounts (23,145) (23,969)
-------- --------
Accounts receivable, net $586,441 $603,198
======== ========
</TABLE>
Credit risk with respect to accounts receivable is concentrated in the
geographic regions in which the Company operates stores. At January 31, 1994
and 1993, approximately 50% of the Company's receivables were concentrated in
California. Concentration of the remaining receivables is considered to be
limited due to their geographical dispersion.
Bad debt expense totaled $25,713, $29,469 and $33,235 for 1993, 1992 and 1991.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 17
Notes to Consolidated Financial Statements
Note 7: PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consist of the following (at cost):
<TABLE>
<CAPTION>
January 31, 1994 1993
- - ------------------------------------------------------------------------
<S> <C> <C>
Land and land improvements $ 41,810 $ 40,806
Buildings 404,910 398,299
Leasehold improvements 471,293 456,087
Store fixtures and equipment 510,789 472,759
---------- ----------
1,428,802 1,367,951
Less accumulated depreciation
and amortization (654,026) (560,932)
---------- ----------
774,776 807,019
Construction in progress 70,820 17,123
---------- ----------
Property, buildings and equipment, net $ 845,596 $ 824,142
========== ==========
</TABLE>
At January 31, 1994 the Company had contractual commitments of approximately
$76,209 for construction of new stores.
Note 8: NOTES PAYABLE
A summary of notes payable is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Average daily short-term
borrowings $ 76,779 $141,979 $183,822
Maximum amount outstanding 117,023 186,038 253,971
Weighted average interest rate
during the year 3.1% 3.7% 5.7%
</TABLE>
The carrying amount of notes payable approximates fair value because of the
short maturity of these instruments.
At January 31, 1994 Nordstrom Credit, Inc. had unsecured lines of credit with
commercial banks totaling $150,000 which are available as liquidity support
for short-term debt. Nordstrom Credit, Inc. pays commitment fees for the
lines in lieu of compensating balance requirements.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 18
Notes to Consolidated Financial Statements
Note 9: LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
January 31, 1994 1993
- - ------------------------------------------------------------------------
<S> <C> <C>
Senior notes, 8.875%-9%, due 1994-1998 $150,000 $150,000
Medium-term notes,
Nordstrom Credit, Inc.,
8.05%-9.6%, due 1994-2001 210,000 250,000
Sinking fund debentures,
Nordstrom Credit, Inc., 9.375%, due 2016,
payable in annual installments of $3,750
beginning in 1997 55,600 55,600
Other 22,974 26,345
-------- --------
Total long-term debt 438,574 481,945
Less current portion (102,164) (41,316)
-------- --------
Total due beyond one year $336,410 $440,629
======== ========
</TABLE>
The senior note agreements contain restrictive covenants which, among other
things, restrict dividends to shareholders to a formula amount. At January
31, 1994, approximately $569,993 of retained earnings was not restricted.
Aggregate principal payments on long-term debt are as follows: 1994-$102,164;
1995-$75,967; 1996-$74,210; 1997-$5,053; and 1998-$105,183.
The fair value of long-term debt at January 31, 1994, estimated using quoted
market prices of the same or similar issues with the same remaining maturity,
was approximately $478,000.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 19
Notes to Consolidated Financial Statements
Note 10: LEASES
The Company leases land, buildings and equipment under non-cancelable lease
agreements with expiration dates ranging from 1994 to 2080. Certain of the
leases include renewal provisions at the Company's option. Most of the leases
provide for additional rentals based upon specific percentages of sales and
require the Company to pay for certain other costs.
Future minimum lease payments as of January 31, 1994 are as follows: 1994-
$29,356; 1995-$26,218; 1996-$25,616; 1997-$24,721; 1998-$23,369; and
thereafter -$218,582.
The following is a schedule of rent expense:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rent:
Store locations $14,899 $14,719 $12,023
Offices, warehouses and equipment 19,390 17,660 16,913
Contingent rent:
Store location percentage rent 13,964 13,398 12,287
Common area costs, taxes and other 8,692 8,105 8,124
------- ------- -------
Total rent expense $56,945 $53,882 $49,347
======= ======= =======
</TABLE>
Note 11: STOCK OPTION PLAN
The Company provides a stock option plan for certain key employees. Options
are issued at market value on the date of grant and become exercisable over a
five-year period. The number of shares reserved for future stock options
grants is 996,831.
A summary of stock option activity follows:
<TABLE>
<CAPTION>
Range of prices
Shares per share
- - ------------------------------------------------------------------------
<S> <C> <C>
Outstanding, February 1, 1993 1,444,357 $ 7.44-$43.25
Granted 450,950 27.75- 36.00
Exercised 81,410 7.44- 32.50
Cancelled 81,433 22.00- 43.25
--------- ---------------
Outstanding, January 31, 1994 1,732,464 $ 7.44-$43.25
========= ===============
Exercisable, January 31, 1994 796,717 $ 7.44-$43.25
========= ===============
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 20
Notes to Consolidated Financial Statements
Note 12: SUPPLEMENTARY CASH FLOW INFORMATION
Supplementary cash flow information includes the following:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Interest (net of capitalized
interest) $41,122 $47,994 $50,905
Income taxes 86,485 79,740 94,766
</TABLE>
Note 13: CREDIT CARD AND FINANCING SUBSIDIARIES
Nordstrom National Credit Bank (the Bank), a wholly-owned subsidiary, issues
credit cards for use in Company stores. Nordstrom Credit, Inc., a wholly-
owned subsidiary, finances customer receivables generated by the Bank.
Condensed combined financial information of the subsidiaries is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Service charge income $91,026 $92,553 $88,626
Other income 5,086 4,121 1,821
------- ------- -------
Total revenue $96,112 $96,674 $90,447
======= ======= =======
Net earnings $22,209 $19,699 $15,545
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
January 31, 1994 1993
- - ------------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and cash equivalents $ 21,972 $ 18,444
Accounts receivable, net 564,605 583,186
Other assets 8,527 9,552
-------- --------
Total assets $595,104 $611,182
======== ========
Liabilities and investment of Nordstrom, Inc.:
Notes Payable $152,837 $150,819
Accounts payable and accrued liabilities 20,902 21,207
Long-term debt 265,600 305,600
Investment of Nordstrom, Inc. 155,765 133,556
-------- --------
Total liabilities and investment
of Nordstrom, Inc. $595,104 $611,182
======== ========
</TABLE>
<PAGE>
21 NORDSTROM, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 14: SELECTED QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------
Year ended January 31, 1994 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $695,559 $1,017,582 $769,373 $1,107,424 $3,589,938
Gross Profit 212,971 306,565 245,057 356,041 1,120,634
Earnings before income taxes 18,395 70,151 42,056 100,316 230,918
Net earnings 11,295 42,651 25,456 61,016 140,418
Earnings per share .14 .52 .31 .74 1.71
Dividends per share .085 .085 .085 .085 .34
Year ended January 31, 1993 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
- - --------------------------------------------------------------------------------------------------------
Net Sales $663,809 $951,616 $737,301 $1,069,253 $3,421,979
Gross Profit 211,920 299,584 239,103 332,265 1,082,872
Earnings before income taxes 35,282 67,953 37,729 81,155 222,119
Net earnings 21,582 41,653 23,429 49,955 136,619
Earnings per share .26 .51 .29 .61 1.67
Dividends per share .08 .08 .08 .08 .32
<PAGE>
22 NORDSTROM, INC. AND SUBSIDIARIES
Management and Independent Auditors' Reports
REPORT OF MANAGEMENT
The accompanying consolidated financial statements, including the notes
thereto, and the other financial information presented in this Annual Report
have been prepared by management. The financial statements have been prepared
in accordance with generally accepted accounting principles and include
amounts that are based upon our best estimates and judgments. Management is
responsible for the consolidated financial statements, as well as the other
financial information in this Annual Report.
The Company maintains an effective system of internal accounting control. We
believe that this system provides reasonable assurance that transactions are
executed in accordance with management authorization, and that they are
appropriately recorded, in order to permit preparation of financial statements
in conformity with generally accepted accounting principles and to adequately
safeguard, verify and maintain accountability of assets. The concept of
reasonable assurance is based on the recognition that the cost of a system of
internal control should not exceed the benefits derived.
The consolidated financial statements and related notes have been audited by
Deloitte & Touche, independent certified public accountants. The accompanying
auditors' report expresses an independent professional opinion on the fairness
of presentation of management's financial statements.
The Audit Committee of the Board of Directors is composed of the outside
directors, and is responsible for recommending the independent certified
public accounting firm to be retained for the coming year, subject to
shareholder approval. The Audit Committee meets periodically with the
independent auditors, as well as with management and internal auditors, to
review accounting, auditing, internal accounting controls and financial
reporting matters. The independent auditors and the internal auditors also
meet privately with the Audit Committee.
John A. Goesling
Executive Vice President and Chief Financial Officer
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 23
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheets of Nordstrom,
Inc. and subsidiaries as of January 31, 1994 and 1993, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the three years in the period ended January 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 consolidated financial statements present fairly, in all
material respects, the financial position of Nordstrom, Inc. and subsidiaries
as of January 31, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended January 31, 1994,
in conformity with generally accepted accounting principles.
Deloitte & Touche
Seattle, Washington; March 11, 1994
<PAGE>
24 NORDSTROM, INC. AND SUBSIDIARIES
Ten-Year Statistical Summary
Dollars in thousands except square footage and per share amounts
</TABLE>
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Position
Customer accounts receivable, net $ 565,151 $ 584,379 $ 585,490 $ 558,573 $ 519,656
Merchandise inventories 585,602 536,739 506,632 448,344 419,976
Current assets 1,314,914 1,219,844 1,177,638 1,090,379 1,011,148
Current liabilities 627,485 511,196 553,903 551,835 489,888
Working capital 687,429 708,648 623,735 538,544 521,260
Working capital ratio 2.10 2.39 2.13 1.98 2.06
Property, buildings and equipment, net 845,596 824,142 856,404 806,191 691,937
Long-term debt 438,574 481,945 511,000 489,172 468,412
Debt/capital ratio 29.11 33.09 40.74 43.59 43.78
Shareholders' equity 1,166,504 1,052,031 939,231 826,410 733,250
Shares outstanding 82,059,128 81,974,797 81,844,227 81,737,910 81,584,710
Book value per share 14.22 12.83 11.48 10.11 8.99
Total assets 2,177,481 2,053,170 2,041,875 1,902,589 1,707,420
Operations
Net sales 3,589,938 3,421,979 3,179,820 2,893,904 2,671,114
Costs and expenses:
Cost of sales and related
buying and occupancy 2,469,304 2,339,107 2,169,437 2,000,250 1,829,383
Selling, general and administrative 940,579 902,083 831,505 747,770 669,159
Interest, net 37,646 44,810 49,106 52,228 49,121
Service charge income and other, net (88,509) (86,140) (87,443) (84,660) (55,958)
Total costs and expenses 3,359,020 3,199,860 2,962,605 2,715,588 2,491,705
Earnings before income taxes 230,918 222,119 217,215 178,316 179,409
Income taxes 90,500 85,500 81,400 62,500 64,500
Net earnings 140,418 136,619 135,815 115,816 114,909
Earnings per share 1.71 1.67 1.66 1.42 1.41
Dividends per share .34 .32 .31 .30 .28
Net earnings as a percent of net sales 3.91% 3.99% 4.27% 4.00% 4.30%
Return on average shareholders' equity 12.66% 13.72% 15.38% 14.85% 16.74%
Sales per square foot for Company-
operated stores 383 381 388 391 398
Stores and Facilities
Company-operated stores 74 72 68 63 59
Total square footage 9,282,000 9,224,000 8,590,000 7,655,000 6,898,000
</TABLE>
<PAGE>
25 NORDSTROM INC. AND SUBSIDIARIES
Ten-Year Statistical Summary (continued)
<TABLE>
<CAPTION>
Dollars in thousands except square footage and per share amounts
- - -----------------------------------------------------------------------------------------------------------
Year ended January 31, 1989 1988 1987 1986 1985
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Position
Customer accounts receivable, net $ 465,929 $ 391,387 $ 344,045 $ 296,030 $ 214,831
Merchandise inventories 403,795 312,696 257,334 226,017 162,361
Current assets 913,986 730,182 645,326 546,756 402,898
Current liabilities 448,165 394,699 324,697 339,503 239,331
Working capital 465,821 335,483 320,629 207,253 163,567
Working capital ratio 2.04 1.85 1.99 1.61 1.68
Property, buildings and equipment, net 594,038 502,661 424,228 397,380 313,818
Long-term debt 389,216 260,343 271,054 276,419 199,387
Debt/capital ratio 43.12 39.57 41.57 56.41 50.12
Shareholders' equity 639,941 533,209 451,196 314,119 271,709
Shares outstanding 81,465,027 81,371,106 80,981,722 74,504,392 74,382,408
Book value per share 7.86 6.55 5.57 4.22 3.65
Total assets 1,511,703 1,234,267 1,071,124 945,880 717,557
Operations
Net sales 2,327,946 1,920,231 1,629,918 1,301,857 958,678
Costs and expenses:
Cost of sales and related
buying and occupancy 1,563,832 1,300,720 1,095,584 893,874 648,270
Selling, general and administrative 582,973 477,488 408,664 326,758 243,845
Interest, net 39,977 32,952 34,910 30,482 20,682
Service charge income and other, net (57,268) (53,662) (49,479) (36,636) (26,630)
Total costs and expenses 2,129,514 1,757,498 1,489,679 1,214,478 886,167
Earnings before income taxes 198,432 162,733 140,239 87,379 72,511
Income taxes 75,100 70,000 67,300 37,300 31,800
Net earnings 123,332 92,733 72,939 50,079 40,711
Earnings per share 1.51 1.13 .91 .65 .54
Dividends per share .22 .18 .13 .11 .10
Net earnings as a percent of net sales 5.30% 4.83% 4.48% 3.85% 4.25%
Return on average shareholders' equity 21.03% 18.84% 19.06% 17.10% 15.98%
Sales per square foot for Company-
operated stores 380 349 322 293 267
Stores and Facilities
Company-operated stores 58 56 53 52 44
Total square footage 6,374,000 5,527,000 5,098,000 4,727,000 3,924,000
</TABLE>
<PAGE>
26 NORDSTROM INC. AND SUBSIDIARIES
Officers, Directors and Committees
<TABLE>
<CAPTION>
Officers
<S> <C> <C> <C>
Jammie Baugh 40 Executive Vice President Southern California
General Manager
Gail A. Cottle 42 Executive Vice President Product Development
Dale C. Crichton 45 Vice President Cosmetics and Gift
Gallery Merchandise
Manager
Joseph V. Demarte 42 Vice President Personnel
Annette S. Dresser 33 Vice President Individualist and
Petite Focus
Merchandise Manager
Charles L. Dudley 43 Vice President Human Resources
John A. Goesling 48 Executive Vice President
and Treasurer Finance
Tamela J. Hickel 33 Vice President Oregon General Manager
Darrel J. Hume 46 Vice President Men's Sportswear
Merchandise Manager
Jack F. Irving 49 Executive Vice President Men's Wear Merchandise
Manager
Raymond A. Johnson 52 Co-President
Barbara J. Kanaya 47 Vice President Accessories
Merchandise Manager
Cody K. Kondo 38 Vice President Northeast General
Manager
David P. Lindsey 44 Vice President Store Planning
David L. Mackie 45 Vice President Legal and Real Estate
Robert J. Middlemas 37 Vice President Midwest General
Manager
Blake W. Nordstrom 33 Vice President Washington and Alaska
General Manager
James A. Nordstrom 32 Vice President Northern California
General Manager
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 27
<TABLE>
<S> <C> <C> <C>
Robert T. Nunn 54 Executive Vice President Shoe Merchandise
Manager
Cynthia C. Paur 43 Executive Vice President Better Apparel
Merchandise Manger
Karen E. Purpur 50 Secretary
John J. Whitacre 41 Co-President
Martha S. Wikstrom 37 Vice President Capital General
Manager
</TABLE>
<PAGE>
28 NORDSTROM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Directors
<S> <C> <C> <C>
D. Wayne Gittinger 61 Director Partner, Lane Powell Spears
Lubersky, Seattle, WA
John F. Harrigan 68 Director Retired Chairman, Union Bank,
Los Angeles, CA
Charles A. Lynch 66 Director Chairman, Market Value Partners
Company, Menlo Park, CA
Ann D. McLaughlin 52 Director President, Federal City Council,
Washington, D.C. and Vice
Chairman, The Aspen Institute,
Aspen, CO
John A. McMillan 62 Co-Chairman of the Board of Directors
Bruce A. Nordstrom 60 Co-Chairman of the Board of Directors
James F. Nordstrom 54 Co-Chairman of the Board of Directors
John N. Nordstrom 56 Co-Chairman of the Board of Directors
Alfred E. Osborne, Jr. 49 Director Director, Entrepreneurial Studies
Center and Associate Professor
of Business Economics, The John
E. Anderson Graduate School of
Management, University of
California, Los Angeles, CA
William D. Ruckelshaus 61 Director Chairman of the Board and Chief
Executive Officer,
Browning-Ferris Industries,
Inc., Houston, TX
Malcolm T. Stamper 68 Director Publisher, Chairman and Chief
Executive Officer,
Storytellers, Ink., Seattle, WA
Elizabeth Crownhart Vaughan 65 Director President, Salar Enterprises,
Portland, OR
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 29
Committees
EXECUTIVE
John A. McMillan
Bruce A. Nordstrom
James F. Nordstrom
John N. Nordstrom
AUDIT
John F. Harrigan
Charles A. Lynch
Ann D. McLaughlin
Alfred E. Osborne, Jr.
William D. Ruckelshaus, Chair
Elizabeth Crownhart Vaughan
COMPENSATION AND STOCK OPTION
D. Wayne Gittinger
John F. Harrigan
Ann D. McLaughlin
Alfred E. Osborne, Jr.
William D. Ruckelshaus
Elizabeth Crownhart Vaughan, Chair
CONTRIBUTIONS
Anne E. Gittinger, Secretary-ex officio
Bruce A. Nordstrom
James F. Nordstrom, Chair
John N. Nordstrom
William D. Ruckelshaus
Malcolm T. Stamper
FINANCE
John A. Goesling--ex officio
John F. Harrigan, Chair
Charles A. Lynch
Alfred E. Osborne, Jr.
Malcolm T. Stamper
ORGANIZATION AND NOMINATING
D. Wayne Gittinger
Charles A. Lynch
Malcolm T. Stamper, Chair
Elizabeth Crownhart Vaughan
PROFIT SHARING AND BENEFITS
Joseph V. Demarte-ex officio
D. Wayne Gittinger
Raymond A. Johnson-ex officio
Bruce A. Nordstrom, Chair
John N. Nordstrom
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 30
Retail Store Facilities
The following table sets forth certain information with respect to each of the
stores operated by the Company. The Company also operates leased shoe
departments in 11 department stores in Hawaii. In addition, the Company
operates eight distribution centers and leases other space for administrative
functions.
<TABLE>
<CAPTION>
Present Present
Year opened total store Year opened total store
Location or acquired area/sq. ft. Location or acquired area/sq. ft.
- - ------------------------------------------------ -------------------------------------------------
<S> <C> <C> <C> <C> <C>
WASHINGTON GROUP NORTHERN CALIFORNIA GROUP
Downtown Seattle(1) 1963 245,000 Hillsdale Shopping Center 1982 149,000
Northgate Mall 1965 122,000 Broadway Plaza 1984 193,000
Tacoma Mall 1966 132,000 Stanford Shopping Center 1984 187,000
Bellevue Square 1967 184,000 The Village at Corte Madera 1985 116,000
Southcenter Mall 1968 170,000 Oakridge Mall 1985 150,000
Yakima 1972 44,000 Valley Fair 1987 165,000
Spokane 1974 121,000 280 Metro Center Rack 1987 31,000
Alderwood Mall 1979 127,000 Stonestown Galleria 1988 174,000
Pavilion Rack 1985 39,000 Downtown San Francisco 1988 350,000
Alderwood Rack 1985 25,000 Arden Fair 1989 190,000
Downtown Seattle Rack 1987 42,000 Stoneridge Mall 1990 173,000
Marina Square Rack 1990 44,000
OREGON GROUP
Lloyd Center 1963 150,000 ALASKA GROUP
Downtown Portland 1966 174,000 Anchorage 1975 97,000
Washington Square 1974 108,000
Vancouver Mall 1977 71,000 UTAH GROUP
Salem Centre 1980 71,000 Crossroads Plaza 1980 140,000
Clackamas Town Center 1981 121,000 Fashion Place Mall 1981 110,000
Clackamas Rack 1983 28,000 Ogden City Mall 1982 76,000
Downtown Portland Rack 1986 19,000 Sugarhouse Center Rack 1991 31,000
SOUTHERN CALIFORNIA GROUP CAPITAL GROUP
South Coast Plaza 1978 235,000 Tysons Corner Center 1988 239,000
Brea Mall 1979 195,000 The Fashion Centre at
Los Cerritos Center 1981 122,000 Pentagon City 1989 241,000
Fashion Valley Mall 1981 156,000 Potomac Mills Rack 1990 46,000
Glendale Galleria 1983 147,000 Montgomery Mall 1991 225,000
Santa Ana Rack 1983 22,000 City Place Rack 1992 37,000
Topanga Plaza 1984 154,000 Towson Town Center 1992 205,000
University Towne Centre 1984 130,000 Towson Rack 1992 31,000
Woodland Hills Rack 1984 48,000 Franklin Mills Factory Direct 1993 43,000
The Galleria at South Bay 1985 161,000
Westside Pavilion 1985 150,000 NORTHEAST GROUP
Horton Plaza 1985 151,000 Garden State Plaza 1990 272,000
Mission Valley Rack 1985 27,000 Menlo Park Mall 1991 266,000
Montclair Plaza 1986 133,000 Freehold Raceway Mall 1992 174,000
North County Fair 1986 156,000 Facconable 1993 10,000
MainPlace Mall 1987 169,000
Chino Town Square Rack 1987 30,000 MIDWEST GROUP
Paseo Nuevo 1990 186,000 Oakbrook Center 1991 249,000
The Galleria at Tyler 1991 164,000 Mall of America 1992 240,000
PLACE TWO AND CLEARANCE STORES
Washington and Arizona 99,000
<FN>
(1) Excludes approximately 23,000 square feet of corporate and administrative
offices.
(2) Includes four Place Two stores and one clearance store.
</TABLE>
<PAGE>
Shareholder Information
Independent Auditors
Deloitte & Touche
Counsel
Lane Powell Spears Lubersky
Transfer Agent and Registrar
First Interstate Bank of California
Telephone (800) 522-6645
General Offices
1501 Fifth Avenue, Seattle, WA 98101-1603
Telephone (206) 628-2111
Annual Meeting
May 17, 1994 at 9:00 a.m. Central Time
Oakbrook Hills Hotel and Resort
Oak Brook, Illinois
Form 10-K
The Company's Annual Report to the Securities and Exchange Commission on Form
10-K for the year ended January 31, 1994 will be provided to shareholders upon
written request to:
Investors Relations, Nordstrom, Inc., P.O. Box 2737,
Seattle, WA 98111 or by calling (206) 233-6690.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
Appendix
<TABLE>
<CAPTION>
Graph Page
- - ------------------------------------------------ ----
<S> <C>
Net Sales 3
Net Earnings 3
Percentage of 1993 Sales by Merchandise Category 5
Investing and Operating Cash Flows 7
Square Footage by Market Area at end of 1993 8
</TABLE>
EXHIBIT 22.1
NORDSTROM, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
Name of Subsidiary State of Incorporation
- - ------------------------------ ----------------------
Nordstrom Credit, Inc. Colorado
Nordstrom National Credit Bank Colorado
