<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
For the fiscal year ended January 31, 1995
/ / 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. /X/
1 of 13
<PAGE>
On March 21, 1995, 82,251,665 shares of common stock were outstanding, and the
aggregate market value of those shares (based upon the closing price as
reported by NASDAQ) held by non-affiliates was approximately $2 billion.
Documents Incorporated by Reference:
Portions of Nordstrom, Inc. 1994 Annual Report to Shareholders
(Parts I and II)
Portions of Proxy Statement for 1995 Annual Meeting of Shareholders
(Part III)
2 of 13
<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. As of January 31,
1995, the Company operates 55 large 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. In March 1995, the Company opened two new large
specialty stores in Schaumburg, Illinois and White Plains, New York in
accordance with the Company's planned new store opening schedule.
The Company also operates eighteen stores under the name "Nordstrom Rack", and
one clearance store 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, a men's and
women's specialty store in Washington and leased shoe departments in twelve
department stores in Hawaii and Guam. In addition, the Company operates a
Direct Sales Division which commenced operations at the end of 1993 with the
mailing of its first catalog. The Company is also involved in tests of
interactive television shopping.
The Company regularly employs on a full or part-time basis an average of
approximately 35,000 employees. Due to the seasonal nature of the Company's
business, the number increased to approximately 42,000 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 1994 Annual Report to Shareholders, which
sections are incorporated by reference herein from Exhibit 13.1 of this
report:
About the Company
Message to our Shareholders
Management Discussion and Analysis
Note 12 in Notes to Consolidated
Financial Statements
3 of 13
<PAGE>
Executive Officers of the Registrant
------------------------------------
<TABLE>
<CAPTION>
Officer
Name Age Title Since Family Relationship
-------------------- --- ------------------ ------- -------------------
<S> <C> <C> <C> <C>
Jammie Baugh 41 Executive Vice 1990 None
President
Gail A. Cottle 43 Executive Vice 1985 None
President
Joseph V. Demarte 43 Vice President 1990 None
John A. Goesling 49 Executive Vice 1980 None
President and
Treasurer
Jack F. Irving 50 Executive Vice 1980 None
President
Raymond A. Johnson 53 Co-President 1976 None
John A. McMillan 63 Co-Chairman of the 1969 Cousin by marriage of
Board of Directors Bruce A., James F.,
and John N. Nordstrom
Blake W. Nordstrom 34 Vice President 1991 Son of Bruce A.
Nordstrom
Bruce A. Nordstrom 61 Co-Chairman of the 1966 Cousin of James F.
Board of Directors and John N. Nordstrom
James A. Nordstrom 33 Vice President 1991 Son of John N.
Nordstrom
James F. Nordstrom 55 Co-Chairman of the 1969 Brother of John N.
Board of Directors Nordstrom
John N. Nordstrom 57 Co-Chairman of the 1966 Brother of James F.
Board of Directors Nordstrom
Robert T. Nunn 55 Executive Vice 1983 None
President
Cynthia C. Paur 44 Executive Vice 1983 None
President
John C. Walgamott 49 President of 1991 None
Nordstrom Credit,
Inc. and Nordstrom
National Credit Bank
John J. Whitacre 42 Co-President 1989 None
<FN>
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 and until a successor
is elected and qualifies.
</TABLE>
4 of 13
<PAGE>
Item 2. Properties.
--------------------
<TABLE>
The following table summarizes at January 31, 1995 the number of stores owned
or operated by the Company and the percentage of total store area represented
by each listed category:
<CAPTION>
Number of % of total store
stores square footage
--------- ----------------
<S> <C> <C>
Owned Stores 20 28%
Leased Stores 30 21
Owned on leased land 23 46
Partly owned & partly leased 3 5
--------- ----------------
76 100%
========= ================
</TABLE>
The Company also operates seven merchandise distribution centers, five of
which are owned and two 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 26 large specialty stores, six Rack 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 1994 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 13
<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 NASDAQ. The approximate number of
holders of Common Stock as of March 21, 1995 was 75,000.
Certain other information required under this Item with respect to stock
prices and dividends is included in the following sections of the Company's
1994 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 8 in Notes to Consolidated Financial Statements
Note 13 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 1994 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 1994 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 1994 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 13
<PAGE>
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 1995 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 1995 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, 1995
Compensation and Stock Option Committee Report on Fiscal Year
1994 Executive Compensation
Stock Price Performance
Compensation of Directors
Compensation Committee Interlocks and Insider Participation
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 1995 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 13
<PAGE>
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 1995 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
Compensation Committee Interlocks and Insider Participation
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
-----------------------------
Page
----
Independent Auditors' Consent and Report on Schedule 12
II - Valuation and Qualifying Accounts 13
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 1994 Annual Report to Shareholders as incorporated by
reference herein from Exhibit 13.1 of this report.
8 of 13
<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, as amended, are filed herein as an
Exhibit.
(4.1) The Indenture between Nordstrom Credit, Inc. (a wholly-owned
subsidiary of the 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 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.
(4.2) Trustee Resignation of First Interstate Bank of Washington, N.A.
dated March 13, 1995 is filed herein as an Exhibit.
(4.3) Trustee Acceptance of First Interstate Bank of Denver, N.A. dated
March 13, 1995 is filed herein as an Exhibit.
(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 (SEC File No. 0-12994) for the
quarter ended July 31, 1991, Exhibit 10.1, as amended.
(10.2) Merchant Agreement dated August 30, 1991 between Registrant and
Nordstrom National Credit Bank is hereby incorporated by reference
from the Registrant's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1991, Exhibit 10.1.
(10.3) The 1987 Nordstrom Stock Option Plan is hereby incorporated by
reference from the Registrant's Proxy Statement for the 1987
Annual Meeting of Shareholders.
(10.4) 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.
(10.5) The 1993 Non-Employee Director Stock Incentive Plan is hereby
incorporated by reference from the Registrant's Form 10-K for the
year ended January 31, 1994, Exhibit 10.4.
9 of 13
<PAGE>
(10.6) Investment Agreement dated October 8, 1984 between the Registrant
and Nordstrom Credit, Inc. is hereby incorporated by reference
from the Nordstrom Credit, Inc. Form 10, Exhibit 10.1.
(10.7) Operating Agreement for VISA Accounts and Receivables dated May 1,
1994 between Nordstrom Credit, Inc. and Nordstrom National Credit
Bank is hereby incorporated by reference from Registration No.
33-55905, Exhibit 10.1.
(13.1) The Company's 1994 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 and Report on Schedule is on page 12
of this report.
(27.1) Financial Data Schedule is filed herein as an Exhibit.
All other exhibits are omitted because they are not applicable, not
required, or because the required information is included in the
Company's 1994 Annual Report to Shareholders.
(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, 1995 by __________________________________________
____________________ John A. Goesling
Executive Vice President and Treasurer
(Principal Accounting and Financial Officer)
10 of 13
<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/ Philip M. Condit /s/ James F. Nordstrom
_______________________________ ________________________________
Philip M. Condit James F. Nordstrom
Director Co-Chairman
/s/ D. Wayne Gittinger /s/ John N. Nordstrom
_______________________________ ________________________________
D. Wayne Gittinger John N. Nordstrom
Director Co-Chairman
/s/ John F. Harrigan /s/ Alfred E. Osborne Jr.
_______________________________ ________________________________
John F. Harrigan Alfred E. Osborne Jr.
Director Director
/s/ Charles A. Lynch
_______________________________ ________________________________
Charles A. Lynch William D. Ruckelshaus
Director Director
/s/ Ann D. McLaughlin /s/ Malcolm T. Stamper
_______________________________ ________________________________
Ann D. McLaughlin Malcolm T. Stamper
Director Director
/s/ John A. McMillan /s/ Elizabeth Crownhart Vaughan
_______________________________ ________________________________
John A. McMillan Elizabeth Crownhart Vaughan
Co-Chairman Director
/s/ Bruce A. Nordstrom
_______________________________
Bruce A. Nordstrom
Co-Chairman
Date March 31, 1995
___________________________
11 of 13
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
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 10, 1995 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, 1995.
We have audited the consolidated financial statements of Nordstrom, Inc. and
subsidiaries as of January 31, 1995 and 1994, and for each of the three years
in the period ended January 31, 1995, and have issued our report thereon dated
March 10, 1995; such financial statements and report are included in your 1994
Annual Report to Shareholders and are incorporated herein by reference. Our
audits also included the consolidated financial statement schedule of
Nordstrom, Inc. and subsidiaries, listed in Item 14(a)2. This financial
statement schedule is 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 schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.
Deloitte & Touche LLP
March 31, 1995
Seattle, Washington
12 of 13
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
SCHEDULE II - 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
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Year ended:
January 31, 1995 $23,145 $20,219 $20,406 $22,958
January 31, 1994 $23,969 $25,713 $26,537 $23,145
January 31, 1993 $24,192 $29,469 $29,692 $23,969
</TABLE>
13 of 13
<PAGE>
NORDSTROM INC. AND SUBSIDIARIES
<TABLE>
Exhibit Index
<CAPTION>
Exhibit Method of Filing
------- ----------------
<S> <C> <C>
3.1 Articles of Incorporation Incorporated by reference
from the Registrant's Form
10-K for the year ended
January 31, 1990,
Exhibit A.
3.2 By-laws Filed herewith electronically
4.1 Indenture between Nordstrom Credit, Incorporated by reference
Inc. and First Interstate Bank of from Registration
Denver, N.A., as successor trustee, No. 33-3765, Exhibit 4.2;
dated November 15, 1984, the First Registration No. 33-19743,
Supplement thereto dated January 15, Exhibit 4.2; Registration
1988, the Second Supplement thereto No. 33-29193, Exhibit 4.3;
dated June 1, 1989 and the Third and the Nordstrom Credit,
Supplement thereto dated October 19, Inc. Annual Report on Form
1990 10-K (SEC File No. 0-12994)
for the year ended January
31, 1991, Exhibit 4.2,
respectively.
4.2 Trustee Resignation of First Interstate Filed herewith electronically
Bank of Washington, N.A. dated March 13,
1995
4.3 Trustee Acceptance of First Interstate Filed herewith electronically
Bank of Denver, N.A. dated March 13,
1995
10.1 Operating Agreement dated August 30, 1991 Incorporated by reference
between Nordstrom, Credit, Inc. and from the Nordstrom Credit,
Nordstrom National Credit Bank Inc. Quarterly Report on
Form 10-Q (SEC File No.
0-12994) for the quarter
ended July 31, 1991,
Exhibit 10.1, as amended.
10.2 Merchant Agreement dated August 30, 1991 Incorporated by reference
between Registrant and Nordstrom from the Registrant's
National Credit Bank Quarterly Report on Form
10-Q for the quarter ended
July 31, 1991, Exhibit
10.1.
10.3 1987 Nordstrom Stock Option Plan Incorporated by reference
from the Registrant's Proxy
Statement for the 1987
Annual Meeting of
Shareholders.
<PAGE>
Exhibit Index (continued)
10.4 Nordstrom Supplemental Retirement Plan Incorporated by reference
from the Registrant's Form
10-K for the year ended
January 31, 1992, Exhibit
10.3.
10.5 1993 Non-Employee Director Stock Incorporated by reference
Incentive Plan from the Registrant's Form
10-K for the year ended
January 31, 1994, Exhibit
10.4.
10.6 Investment Agreement dated October 8, Incorporated by reference
1984 between the Registrant and from the Nordstrom Credit,
Nordstrom Credit, Inc. Inc. Form 10, Exhibit 10.1.
10.7 Operating Agreement for VISA Accounts Incorporated by reference
and Receivables dated May 1, 1994 from Registration No. 33-
between Nordstrom Credit, Inc. and 55905, Exhibit 10.1.
Nordstrom National Credit Bank
13.1 1994 Annual Report to Shareholders Filed herewith electronically
21.1 Subsidiaries of the Registrant Filed herewith electronically
23.1 Independent Auditors' Consent
and Report on Schedule Filed herewith electronically
27.1 Financial Data Schedule Filed herewith electronically
</TABLE>
<PAGE>
Exhibit 4.2
TRUSTEE RESIGNATION
TO: Nordstrom Credit, Inc.
In connection with the appointment of First Interstate Bank of Denver,
N.A. as successor trustee under the Indenture (defined below), First
Interstate Bank of Washington, N.A. (the "Resigning Trustee"), hereby resigns
as trustee under that certain indenture by and between the Company and the
Resigning Trustee dated as of November 15, 1984, as supplemented by the First
Supplemental Indenture dated as of January 15, 1988, the Second Supplemental
Indenture dated as of June 1, 1989 and the Third Supplemental Indenture dated
as of October 19, 1990 (as supplemented, the "Indenture"), providing for the
issuance from time to time of unsecured debentures, notes or other evidences
of indebtedness of the Company (the "Securities") to be issued in one or more
series under such Indenture.
This resignation is provided pursuant to Section 610(b) of the Indenture,
and shall be applicable with respect to all series of Securities heretofore
issued under the Indenture.
DATED: March 13, 1995
FIRST INTERSTATE BANK OF
WASHINGTON, N.A.
By /s/Perry R. Tobe
----------------
Perry R. Tobe,
Trust Officer
<PAGE>
Exhibit 4.3
TRUSTEE ACCEPTANCE
TO: First Interstate Bank of Washington, N.A.
Nordstrom Credit, Inc.
First Interstate Bank of Denver, N.A. (the "Successor Trustee"), hereby
accepts its appointment by Nordstrom Credit, Inc. (the "Company") as successor
trustee under that certain indenture by and between the Company and First
Interstate Bank of Washington, N.A. (the "Resigning Trustee"), dated as of
November 15, 1984, as supplemented by the First Supplemental Indenture dated
as of January 15, 1988, the Second Supplemental Indenture dated as of June 1,
1989 and the Third Supplemental Indenture dated as of October 19, 1990 (as
supplemented, the "Indenture"), providing for the issuance from time to time
of unsecured debentures, notes or other evidences of indebtedness of the
Company (the "Securities") to be issued in one or more series under such
Indenture.
This acceptance is given pursuant to Section 611 of the Indenture, and
shall be applicable with respect to all series of Securities heretofore issued
under the Indenture.
DATED: March 13, 1995.
FIRST INTERSTATE BANK OF
DENVER, N.A.
By /s/ Laura Rivera
----------------
Laura Rivera, Banking Officer
The Company hereby confirms that First Interstate Bank of Denver, N.A. is
vested with all the rights, powers, trusts and duties of the Resigning Trustee
under the Indenture.
DATED: March 13, 1995
NORDSTROM CREDIT, INC.
By /s/ John C. Walgamott
----------------------
John C. Walgamott, President
<PAGE>
STATE OF COLORADO )
)ss.
COUNTY OF DENVER )
I certify that I know or have satisfactory evidence that Laura Rivera is
the person who appeared before me, and she acknowledged that she signed this
instrument, on oath stated that she was authorized to execute the instrument
and acknowledged it as a Banking Officer of First Interstate Bank of Denver,
N.A., to be the free and voluntary act of such parties for the uses and
purposes mentioned in this instrument.
DATED: March 13, 1995 /s/Lynn E. Taylor
---------------------
(Notary Signature)
Lynn E. Taylor
Notary Public for the State of
Colorado
My commission expires: 8/2/97
<PAGE>
Exhibit 3.2
BYLAWS
OF
(Amended and Restated as of May 17, 1994)
ARTICLE I
Offices
The principal office of the corporation in the State of Washington
shall be located in the city of Seattle. The corporation may have such
other offices, either within or without the State of Washington, as the
Board of Directors may designate or as the business of the corporation
may require from time to time.
The registered office of the corporation required by the
Washington Business Corporation Act to be maintained in the State of
Washington may be, but need not be, identical with the principal office
in the State of Washington, and the address of the registered office may
be changed from time to time by the Board of Directors or by officers
designated by the Board of Directors.
ARTICLE II
Shareholders
Section 1. Annual Meetings. The annual meeting of the
shareholders shall be held on the third Tuesday in the month of May each
year, at the hour of 11:00 a.m., unless the Board of Directors shall
have designated a different hour and day in the month of May to hold
said meeting. The meeting shall be for the purpose of electing
directors and the transaction of such other business as may come before
the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Washington, and if the Board of Directors has
not designated some other day in the month of May for such meeting, such
meeting shall be held at the same hour and place on the next succeeding
business day not a holiday. The failure to hold an annual meeting at
the time stated in these Bylaws does not affect the validity of any
corporate action. If the election of directors shall not be held on the
day designated herein or by the Board of Directors for any annual
meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the
shareholders may be called for any purpose or purposes, unless otherwise
prescribed by statute, at any time by the Chairman (or any Co-Chairman),
by the President (or any Co-President), or by the Board of Directors,
and shall be called by the President (or any Co-President) at the
request of holders of not less than 10% of all outstanding shares of the
corporation entitled to vote on any issue proposed to be considered at
the meeting. Only business within the purpose or purposes described in
the meeting notice may be conducted at a special shareholder's meeting.
<PAGE>
Section 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Washington,
as the place of meeting for any annual meeting or for any special
meeting of the corporation. If no such designation is made, the place
of meeting shall be the principal offices of the corporation in the
State of Washington.
Section 4. Notice of Meetings. Written notice of annual or
special meetings of shareholders stating the place, day, and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be given by the Secretary, or
persons authorized to call the meeting, to each shareholder of record
entitled to vote at the meeting, not less than ten (10) nor more than
sixty (60) days prior to the date of the meeting, unless otherwise prescribed
by statute.
Section 5. Waiver of Notice. Notice of the time, place, and
purpose of any meeting may be waived in writing (either before or after
such meeting) and will be waived by any shareholder by attendance of the
shareholder in person or by proxy, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting
business at the meeting. Any shareholder waiving notice of a meeting
shall be bound by the proceedings of the meeting in all respects as if
due notice thereof had been given.
Section 6. Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or to make a determination of
shareholders for any other proper purpose, the Board of Directors may
fix in advance a record date for any such determination of shareholders,
such date to be not more than seventy (70) days and, in the case of a
meeting of shareholders, not less than ten (10) days, prior to the date
on which the particular action requiring such determination of
shareholders is to be taken. If no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to receive payment of
a dividend, the day before the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, the
determination shall apply to any adjournment thereof, unless the Board
of Directors fixes a new record date, which it must do if the meeting is
adjourned more than one hundred twenty (120) days after the date fixed
for the original meeting.
Section 7. Voting Lists. After fixing a record date for a
shareholders' meeting, the corporation shall prepare an alphabetical
list of the names of all shareholders on the record date who are
entitled to notice of the shareholders' meeting. The list shall show
the address of and number of shares held by each shareholder. A
shareholder, shareholder's agent, or a shareholder's attorney may
<PAGE>
inspect the shareholder list, at the shareholder's expense, beginning
ten days prior to the shareholders' meeting and continuing through the
meeting, at the corporation's principal office or at a place identified
in the meeting notice in the city where the meeting will be held during
regular business hours. The shareholder list shall be kept open for
inspection at the time and place of such meeting or any adjournment.
Section 8. Quorum and Adjourned Meetings. Unless the Articles of
Incorporation or applicable law provide otherwise, a majority of the
outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of
shareholders. Once a share is represented at a meeting, other than to
object to holding the meeting or transacting business, it is deemed to
be present for the remainder of the meeting and any adjournment thereof
unless a new record date is set or is required to be set for the
adjourned meeting. A majority of the shares represented at a meeting,
even if less than a quorum, may adjourn the meeting from time to time
without further notice. At a reconvened meeting at which a quorum shall
be present or represented, any business may be transacted which might
have been transacted at the original meeting. Business may continue to
be conducted at a duly organized meeting and at any adjournment of such
meeting (unless a new record date is or must be set for the adjourned
meeting), notwithstanding the withdrawal of enough shares from either
meeting to leave less than a quorum.
Section 9. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the shareholder or
by the shareholder's duly authorized attorney in fact. Such proxy shall
be filed with the Secretary of the corporation before or at the time of
the meeting. No proxy shall be valid after eleven (11) months from the
date of its execution, unless otherwise provided in the proxy.
Section 10. Voting of Shares. Every shareholder of record shall
have the right at every shareholders' meeting to one vote for every
share standing in the shareholder's name on the books of the
corporation. If a quorum exists, action on a matter, other than
election of directors, is approved by the shareholders if the votes cast
favoring the action exceed the votes cast opposing the action, unless
the Articles of Incorporation or applicable law require a greater number
of affirmative votes. Notwithstanding the foregoing, shares of the
corporation may not be voted if they are owned, directly or indirectly,
by another corporation, and the corporation owns, directly or
indirectly, a majority of shares of the other corporation entitled to
vote for directors of the other corporation.
Section 11. Acceptance of Votes. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of
a shareholder of the corporation, the corporation may accept the vote,
consent, waiver or proxy appointment, and give effect to it as the act
of the shareholder if: (i) the shareholder is an entity and the name
signed purports to be that of an officer, partner or agent of the
entity; (ii) the name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder; (iii)
the name signed purports to be that of a receiver or trustee in
<PAGE>
bankruptcy of the shareholder; (iv) the name signed purports to be that
of a pledgee, beneficial owner or attorney-in-fact of the shareholder;
or (v) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one
of the co-owners and the person signing appears to be acting on behalf
of all co-owners.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of
directors of the corporation shall be thirteen. Each director shall
hold office until the next annual meeting of shareholders and until his
successors shall have been elected and qualified. Directors need not be
residents of the State of Washington or shareholders of the corporation.
Section 3. Regular Meeting. A regular meeting of the Board of
Directors shall be held without other notice than this Bylaw immediately
after, and at the same place as, the annual meeting of shareholders.
Regular meetings of the Board of Directors shall be held at such place
and on such day and hour as shall from time to time be fixed by the
Chairman (or any Co-Chairman), the President (or any Co-President) or
the Board of Directors. No other notice of regular meeting of the Board
of Directors shall be necessary.
Section 4. Special Meetings. Special meetings of the Board of
Director may be called by or at the request of the Chairman (or any Co-
Chairman), the President (or any Co-President) or any two Directors.
The person or persons authorized to call special meetings of the Board
of Directors may fix any place, either within or without the State of
Washington, as the place for holding any special meeting of the Board of
Directors called by them.
Section 5. Notice. Notice of any special meeting shall be given
at least two days previously thereto by either oral or written notice.
Any Director may waive notice of any meeting. The attendance of a
Director at a meeting shall constitute a waiver of notice of such
meeting, except where a Director attends a meeting for the express
purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice
of such meeting.
Section 6. Quorum. A majority of the number of Directors fixed
by Section 2 of this Article III shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but if
less than such majority is present at a meeting, a majority of the
Directors present may adjourn the meeting from time to time without
further notice.
<PAGE>
Section 7. Manner of Acting. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.
Section 8. Vacancies. Any vacancy occurring in the Board of
Directors may be filled by the affirmative vote of a majority of the
remaining Directors though less than a quorum of the Board of Directors.
A Director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. A vacancy on the Board of Directors
created by reason of an increase in the number of Directors may be
filled by election by the Board of Directors for a term of the office
continuing only until the next election of Directors by the
shareholders.
Section 9. Compensation. By resolution of the Board of
Directors, each Director may be paid his expenses, if any, of attendance
at each meeting of the Board of Directors and at each meeting of a
committee of the Board of Directors, and may be paid a stated salary as
director, a fixed sum for attendance at each such meeting, or both. No
such payment shall preclude any Director from serving the corporation in
any other capacity and receiving compensation therefor.
Section 10. Presumption of Assent. A Director of the corporation
who is present at a meeting of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of the
meeting, or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment
thereof, or shall forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted
in favor of such action.
ARTICLE IV
Special Measures Applying to Both
Shareholder and Director Meetings
Section 1. Actions by Written Consent. Any corporate action
required or permitted by the Articles of Incorporation, Bylaws, or the
laws under which the corporation is formed, to be voted upon or approved
at a duly called meeting of the Directors, committee of Directors, or
shareholders may be accomplished without a meeting if one or more
unanimous written consents of the respective Directors or shareholders,
setting forth the actions so taken, shall be signed, either before or
after the action taken, by all the Directors, committee members or
shareholders, as the case may be. Action taken by unanimous written
consent of the Directors or a committee of the Board of Directors is
effective when the last Director or committee member signs the consent,
unless the consent specifies a later effective date. Action taken by
unanimous written consent of the shareholders is effective when all
consents have been delivered to the corporation, unless the consent
specifies a later effective date.
<PAGE>
Section 2. Meetings by Conference Telephone. Members of the
Board of Directors, members of a committee of Directors, or shareholders
may participate in their respective meetings by means of a conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same
time; participation in a meeting by such means shall constitute presence
in person at such meeting.
Section 3. Written or Oral Notice. Oral notice may be
communicated in person, or by telephone, wire or wireless equipment,
which does not transmit a facsimile of the notice. Oral notice is
effective when communicated. Written notice may be transmitted by mail,
private carrier, or personal delivery; telegraph or teletype; or
telephone, wire or wireless equipment which transmits a facsimile of the
notice. Written notice to a shareholder is effective when mailed, if
mailed with first class postage prepaid and correctly addressed to the
shareholder's address shown in the corporation's current record of
shareholders. In all other instances, written notice is effective on
the earliest of the following: (a) when dispatched to the person's
address, telephone number, or other number appearing on the records of
the corporation by telegraph, teletype or facsimile equipment; (b) when
received; (c) five days after deposit in the United States mail, as
evidenced by the postmark, if mailed with first class postage, prepaid
and correctly addressed; or (d) on the date shown on the return receipt,
if sent by registered or certified mail, return receipt requested, and
the receipt is signed by or on behalf of the addressee. In addition,
notice may be given in any manner not inconsistent with the foregoing
provisions and applicable law.
ARTICLE V
Officers
Section 1. Number. The offices and officers of the corporation
shall be as designated from time to time by the Board of Directors.
Such offices may include a Chairman of the Board of Directors or two or
more Co-Chairmen of the Board of Directors, a Vice Chairman or two or
more Vice Chairmen, a President or two or more Co-Presidents, one or
more Vice Presidents, a Secretary, a Treasurer and a Controller, Such
other officers and assistant officers as may be deemed necessary may be
elected or appointed by the Board of Directors. Any two or more offices
may be held by the same persons.
Section 2. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer
shall hold office until a successor shall have been duly elected and
qualified, or until the officer's death or resignation, or the officer
has been removed in the manner hereinafter provided.
<PAGE>
Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment, the best interests of the
corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself
create contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by
the Board of Directors for the unexpired portion of the term.
Section 5. Chairman of the Board of Directors. The Chairman or
Co-Chairmen of the Board of Directors, subject to the authority of the
Board of Directors, shall preside at meetings of shareholders,
directors, and executive committee, and, together with the President and
Co-Presidents, shall have general supervision and control over the
business and affairs of the corporation. The Chairman or a Co-Chairman
may sign any and all documents, deeds, mortgages, bonds, contracts,
leases, or other instruments in the ordinary course of business with or
without the signature of a second corporate officer, may sign
certificates for shares of the corporation with the Secretary or
Assistant Secretary of the corporation and may sign any documents which
the Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these Bylaws to some other officer or agent
of the corporation, or shall be required by law to be otherwise signed
or executed; and in general may perform all duties which are normally
incident to the office of Chairman or President and such other duties,
authority, and responsibilities as may be prescribed by the Board of
Directors from time to time.
Section 6. President. The President or Co-Presidents, together
with the Chairman or Co-Chairmen of the Board of Directors, shall have
general supervision and control over the business and affairs of the
corporation subject to the authority of the Board of Directors. The
President or a Co-President may sign any and all documents, mortgages,
bonds, contracts, leases, or other instruments in the ordinary course of
business with or without the signature of a second corporate officer,
may sign certificates for shares of the corporation with the Secretary
or Assistant Secretary of the corporation, and may sign any documents
which the Board of Directors has authorized to be executed, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and in general shall perform all duties
incident to the office of President and such other duties, authority,
and responsibilities as may be prescribed by the Board of Directors from
time to time.
Section 7. Vice Chairman. In the absence of the Chairman and any
Co-Chairman of the Board of Directors, or in the event of their death,
inability or refusal to act, the Vice Chairmen, if any are designated,
in the order indicated at the time of their appointment or, in the
absence of any such indication, in the order of their appointment, shall
<PAGE>
perform the duties of the Chairman of the Board of Directors and, when
so acting, shall have all the powers and be subject to all the
restrictions upon the Chairman of the Board of Directors. The Vice
Chairman may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the corporation and shall perform such other
duties as, from time to time, may be assigned to the Vice Chairman by
the Chairman or any Co-Chairman of the Board of Directors.
Section 8. The Vice President. In the absence of the President
and all Co-Presidents, or in the event of their death, inability or
refusal to act, the Executive Vice President, if one is designated, and
otherwise the Vice Presidents in the order designated at the time of
their election or in the absence of any designation, then in the order
of their election, shall perform the duties of the President and when so
acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign, with the
Secretary or an Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties as from time to time
may be assigned to the Vice President by the President or any Co-
President, or by the Board of Directors.
Section 9. The Secretary. The Secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (c) be custodian of the corporate records
and of the seal of the corporation and see that the seal of the
corporation is affixed to all documents and the execution of which on
behalf of the corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholders; (e) sign with the
President or a Co-President, or with a Vice President, certificates for
shares of the corporation, or contracts, deeds or mortgages the issuance
or execution of which shall have been authorized by resolution of the
Board of Directors; (f) have general charge of the stock transfer books
of the corporation subject to the authority delegated to a transfer
agent or registrar if appointed; and (g) in general perform all duties
incident to the office of Secretary and such other duties as from time
to time may be assigned to the Secretary by the President or any Co-
President, or by the Board of Directors.
Section 10. The Treasurer. The Treasurer shall: (a) have charge
and custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for monies due and payable to
the corporation from any source whatsoever, and deposit all such monies
in the name of the corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provisions of
Article VII of these Bylaws; and (c) in general perform all of the
duties incident to the office of Treasurer and such other duties as from
time to time may be assigned to the Treasurer by the President or any
Co-President, or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
<PAGE>
Section 11. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may
sign with the President or a Co-President, or with a Vice President,
certificates for shares of the corporation or contracts, deeds or
mortgages, the issuance or execution of which shall have been authorized
by a resolution of the Board of Directors. The Assistant Treasurers
shall respectively, if required by the Board of Directors, give bonds
for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the President or any Co-President, or by the Board
of Directors.
Section 12. The Controller. The Controller shall report to the
Treasurer and shall supervise and be responsible for daily operations of
the Financial Department, accounts and account books of the corporation,
all in the ordinary course of business. The Controller shall also
perform such other duties as may from time to time be assigned by the
Treasurer, by the Chairman or Co-Chairman, by the President or any Co-
President, or by the Board of Directors.
ARTICLE VI
Executive Committee
Section 1. Appointment. The Board of Directors by resolution
adopted by a majority of the full Board, may designate two or more of
its members to constitute an Executive Committee. The designation of
such committee and the delegation thereto of authority shall not operate
to relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
Section 2. Authority. The Executive Committee, when the Board of
Directors is not in session, shall have and may exercise all of the
authority of the Board of Directors except to the extent, if any, that
such authority shall be limited by the resolution appointing the
Executive Committee and except also that the Executive Committee shall
not have the authority of the Board of Directors in reference to
amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of
the corporation otherwise than in the usual and regular course of its
business, recommending to the shareholders voluntary dissolution of the
corporation or a revocation thereof, amending the Bylaws of the
corporation or any other action prohibited by applicable law.
Section 3. Tenure and Qualifications. Each member of the
Executive Committee shall hold office until the next regular annual
meeting of the Board of Directors following his designation and until
his successor is designated as a member of the Executive Committee and
is elected and qualified.
<PAGE>
Section 4. Meetings. Regular meetings of the Executive Committee
may be held without notice at such times and places as the Executive
Committee may fix from time to time by resolution. Special meetings of
the Executive Committee may be called by any member thereof upon not
less than one day's notice stating the place, date and hour of the
meeting, which notice may be written or oral. Any member of the
Executive Committee may waive notice of any meeting and no notice of any
meeting need be given to any member thereof who attends in person. The
notice of a meeting of the Executive Committee need not state the
business proposed to be transacted at the meeting.
Section 5. Quorum. A majority of the members of the Executive
Committee shall constitute a quorum for the transaction of business at
any meeting thereof and action of the Executive Committee must be
authorized by the affirmative vote of a majority of the members present
at a meeting at which a quorum is present.
Section 6. Vacancies. Any vacancy in the Executive Committee may
be filled by a resolution adopted by a majority of the full Board of
Directors.
Section 7. Resignations and Removal. Any member of the Executive
Committee may be removed at any time with or without cause by resolution
adopted by a majority of the full Board of Directors. Any member of the
Executive Committee may resign from the Executive Committee at any time
by giving written notice to the Chairman (or any Co-Chairman), the
President (or any Co-President), or to the Secretary, of the
corporation, and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 8. Procedure. The Executive Committee shall elect a
presiding officer from its members and may fix its own rules of
procedure which shall not be inconsistent with these Bylaw. It shall
keep regular minutes of its proceedings and report the same to the Board
of Directors for its information at the meeting thereof held next after
the proceedings shall have been taken.
ARTICLE VII
Contracts, Loans, Checks and Deposits
Section 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by the Board of Directors. Such authority may be
general or confined to specific instances.
<PAGE>
Section 3. Checks. Drafts. etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the corporation, shall be signed by
such officers, agent or agents of the corporation and in such manner as
shall from time to time be determined by the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories as the
Board of Directors may select.
ARTICLE VIII
Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing
shares of the corporation shall be in such form as shall be determined
by the Board of Directors. Such certificates shall be signed by the
Chairman (or any Co-Chairman), the President (or any Co-President) or a
Vice President, and by the Secretary or an Assistant Secretary, and
sealed with the corporate seal or a facsimile thereof. The signatures
of such officers upon a certificate may be facsimiles if the certificate
is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or one of its employees. If any
officer who signed a certificate, either manually or in facsimile, no
longer holds such office when the certificate is issued, the certificate
is nevertheless valid. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of
the person to whom the shares represented thereby are issued, with the
number of shares and date of issue, shall be entered on the stock
transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificate for a like number of shares shall
have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate a new one may be issued therefor upon
such terms and indemnity to the corporation as the Board of Directors
may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
corporation shall be made only on the stock transfer books of the
corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the corporation, or with
its transfer agent, if any, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares stand on
the books of the corporation shall be deemed by the corporation to be
the owner thereof for all purposes.
ARTICLE IX
Fiscal Year
The fiscal year of the corporation shall begin on the first day of
February and end on the thirty-first day of January in each year.
<PAGE>
ARTICLE X
Dividends
The Board of Directors may, from time to time, declare and the
corporation may pay dividends on its outstanding shares in the manner,
and upon the terms and conditions provided by law and its articles of
incorporation.
ARTICLE XI
Corporate Seal
The Board of Directors shall provide a corporate seal which shall
be circular in form and shall have inscribed thereon the name of the
corporation and the state of incorporation and the words, "Corporate
Seal."
ARTICLE XII
Indemnification of Directors, Officers, and Others
Section 1. Right to Indemnification. Each person (including a
person's personal representative) who was or is made a party or is
threatened to be made a party to or is otherwise involved (including,
without limitation, as a witness) in any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal,
administrative, investigative or by or in the right of the corporation,
or otherwise (hereinafter a "proceeding") by reason of the fact that he
or she (or a person of whom he or she is a personal representative) is
or was a director or officer of the corporation or, being or having been
such a director or officer, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, agent or
in any other relationship or capacity whatsoever, of any other foreign
or domestic corporation, partnership, joint venture, employee benefit
plan or trust or other trust, enterprise or other private or
governmental entity, agency, board, commission, body or other unit
whatsoever (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action or inaction in an official capacity as a
director, officer, partner, trustee, employee, agent or in any other
relationship or capacity whatsoever, shall be indemnified and held
harmless by the corporation to the fullest extent not prohibited by the
Washington Business Corporation Act, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent
that such amendment does not prohibit the corporation from providing
broader indemnification rights than prior to the amendment), against all
expenses, liabilities, and losses (including but not limited to
attorneys' fees, judgments, claims, fines, ERISA and other excise and
other taxes and penalties, and other adverse effects and amounts paid in
settlement), reasonably incurred or suffered by the indemnitee;
provided, however, that no such indemnity shall indemnify any person
from or on account of acts or omissions of such person finally adjudged
to be intentional misconduct or a knowing violation of law, or from or
on account of conduct of a director finally adjudged to be in violation
of RCW 23B.08.310, or from or on account of any transaction with respect
to which it was finally adjudged that such person personally received a
benefit in money, property, or services to which the person was not
<PAGE>
legally entitled; and further provided, however, that except as provided
in Section 2 of this Article with respect to suits relating to rights to
indemnification, the corporation shall indemnify any indemnitee in
connection with a proceeding (or part thereof) initiated by the
indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the corporation.
The right to indemnification granted in this Article is a contract
right and includes the right to payment by, and the right to receive
reimbursement from, the corporation of all expenses as they are incurred
in connection with any proceeding in advance of its final disposition
(hereinafter an "advance of expenses"); provided, however, that an
advance of expenses received by an indemnitee in his or her capacity as
a director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee unless required by the Board of
Directors) shall be made only upon (i) receipt by the corporation of a
written undertaking (hereinafter an "undertaking") by or on behalf of
such indemnitee, to repay advances of expenses if and to the extent it
shall ultimately be determined by order of a court having jurisdiction
(which determination shall become final upon expiration of all rights to
appeal), hereinafter a "final adjudication", that the indemnitee is not
entitled to be indemnified for such expenses under this Article, and
(ii) receipt by the corporation of written affirmation by the indemnitee
of his or her good faith belief that he or she has met the standard of
conduct applicable (if any) under the Washington Business Corporation
Act necessary for indemnification by the corporation under this Article.
Section 2. Right of Indemnitee to Bring Suit. If any claim for
indemnification under Section 1 of this Article is not paid in full by
the corporation within sixty days after a written claim has been
received by the corporation, except in the case of a claim for an
advance of expenses, in which case the applicable period shall be twenty
days, the indemnitee may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim. If the
indemnitee is successful in whole or in part in any such suit, or in any
suit in which the corporation seeks to recover an advance of expenses,
the corporation shall also pay to the indemnitee all the indemnitee's
expenses in connection with such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Article upon the
corporation's receipt of indemnitee's written claim (and in any suits
relating to rights to indemnification where the required undertaking and
affirmation have been received by the corporation), and thereafter the
corporation shall have the burden of proof to overcome that presumption.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or shareholders) to have made a
determination prior to other commencement of such suit that the
indemnitee is entitled to indemnification, nor an actual determination
by the corporation (including its Board of Directors, independent legal
counsel or shareholders) that the indemnitee is not entitled to
indemnification, shall be a defense to the suit or create a presumption
that the indemnitee is not so entitled. It shall be a defense to a
claim for an amount of indemnification under this Article (other than a
claim for advances of expenses prior to final disposition of a
proceeding where the required undertaking and affirmation have been
<PAGE>
received by the corporation) that the claimant has not met the standards
of conduct applicable (if any) under the Washington Business Corporation
Act to entitle the claimant to the amount claimed, but the corporation
shall have the burden of proving such defense. If requested by the
indemnitee, determination of the right to indemnity and amount of
indemnity shall be made by final adjudication (as defined above) and
such final adjudication shall supersede any determination made in
accordance with RCW 23B.08.550.
Section 3. Non-Exclusivity of Rights. The rights to
indemnification (including, but not limited to, payment, reimbursement
and advances of expenses) granted in this Article shall not be exclusive
of any other powers or obligations of the corporation or of any other
rights which any person may have or hereafter acquire under any statute,
the common law, the corporation's Articles of Incorporation or Bylaws,
agreement, vote of shareholders or disinterested directors, or
otherwise. Notwithstanding any amendment to or repeal of this Article,
any indemnitee shall be entitled to indemnification in accordance with
the provisions hereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
Section 4. Insurance, Contracts and Funding. The corporation may
purchase and maintain insurance, at its expense, to protect itself and
any person (including a person's personal representative) who is or was
a director, officer, employee or agent of the corporation or who is or
was a director, officer, partner, trustee, employee, agent, or in any
other relationship or capacity whatsoever, of any other foreign or
domestic corporation, partnership, joint venture, employee benefit plan
or trust or other trust, enterprise or other private or governmental
entity, agency, board, commission, body or other unit whatsoever,
against any expense, liability or loss, whether or not the power to
indemnify such person against such expense, liability or loss is now or
hereafter granted to the corporation under the Washington Business
Corporation Act. The corporation may enter into contracts granting
indemnity, to any such person whether or not in furtherance of the
provisions of this Article, and may create trust funds, grant security
interests and use other means (including, without limitation, letters of
credit) to secure and ensure the payment of indemnification amounts.
Section 5. Indemnification of Employees and Agents. The
corporation may, by action of the Board of Directors, provide
indemnification and pay expenses in advance of the final disposition of
a proceeding to employees and agent of the corporation with the same
scope and effect as the provisions of this Article with respect to the
indemnification and advancement of expenses of directors and officers of
the corporation or pursuant to rights granted under, or provided by, the
Washington Business Corporation Act or otherwise.
Section 6. Separability of Provisions. If any provision or
provisions of this Article shall be held to be invalid, illegal or
unenforceable for any reason whatsoever (i) the validity, legality and
enforceability of the remaining provisions of this Article (including
without limitation, all portions of any sections of this Article
containing any such provision held to be invalid, illegal or
<PAGE>
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and
(ii) to the fullest extent possible, the provisions of this Article
(including, without limitation, all portions of any paragraph of this
Article containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
Section 7. Partial Indemnification. If an indemnitee is entitled
to indemnification by the corporation for some or a portion of expenses,
liabilities or losses, but not for the total amount thereof, the
corporation shall nevertheless indemnify the indemnitee for the portion
of such expenses, liabilities and losses to which the indemnitee is
entitled.
Section 8. Successors and Assigns. All obligations of the
corporation to indemnify any indemnitee: (i) shall be binding upon all
successors and assigns of the corporation (including any transferee of
all or substantially all of its assets and any successor by merger or
otherwise by operation of law), (ii) shall be binding on and inure to
the benefit of the spouse, heirs, personal representatives and estate of
the indemnitee, and (iii) shall continue as to any indemnitee who has
ceased to be a director, officer, partner, trustee, employee or agent
(or other relationship or capacity).
ARTICLE XIII
Books and Records
Section 1. Books of Accounts, Minutes and Share Register. The
corporation shall keep as permanent records minutes of all meetings of
its shareholders and Board of Directors, a record of all actions taken
by the shareholders or Board of Directors without a meeting, and a
record of all actions taken by a committee of the Board of Directors
exercising the authority of the Board of Directors on behalf of the
corporation. The corporation shall maintain appropriate accounting
records. The corporation or its agent shall maintain a record of its
shareholders, in a form that permits preparation of a list of the names
and addresses of all shareholders, in alphabetical order showing the
number and class of shares held by each. The corporation shall keep a
copy of the following records at its principal office: the Articles or
Restated Articles of Incorporation and all amendments currently in
effect; the Bylaws or Restated Bylaws and all amendments currently in
effect; the minutes of all shareholders' meetings, and records of all
actions taken by shareholders without a meeting, for the past three
years; its financial statements for the past three years, including
balance sheets showing in reasonable detail the financial condition of
the corporation as of the close of each fiscal year, and an income
statement showing the results of its operations during each fiscal year
prepared on the basis of generally accepted accounting principles or, if
not, prepared on a basis explained therein; all written communications
to shareholders generally within the past three years; a list of the
names and business addresses of its current directors and officers; and
<PAGE>
its most recent annual report delivered to the Secretary of State of
Washington.
Section 2. Copies of Resolutions. Any person dealing with the
corporation may rely upon a copy of any of the records of the
proceedings, resolutions, or votes of the Board of Directors or
shareholders, when certified by the Chairman (or any Co-Chairman),
President (or any Co-President) or Secretary.
ARTICLE XIV
Amendment of Bylaws
These Bylaws may be amended, altered, or repealed by the
affirmative vote of a majority of the full Board of Directors at any
regular or special meeting of the Board of Directors.
<PAGE>
EXHIBIT 21.1
NORDSTROM, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
Name of Subsidiary State of Incorporation
------------------ ----------------------
<S> <C>
Nordstrom Credit, Inc. Colorado
Nordstrom National Credit Bank Colorado
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 32,497
<SECURITIES> 0
<RECEIVABLES> 698,849
<ALLOWANCES> 22,958
<INVENTORY> 627,930
<CURRENT-ASSETS> 1,397,713
<PP&E> 1,730,907
<DEPRECIATION> 746,712
<TOTAL-ASSETS> 2,396,783
<CURRENT-LIABILITIES> 690,454
<BONDS> 297,943
<COMMON> 163,334
0
0
<OTHER-SE> 1,180,466
<TOTAL-LIABILITY-AND-EQUITY> 2,396,783
<SALES> 3,894,478
<TOTAL-REVENUES> 3,894,478
<CGS> 2,599,553
<TOTAL-COSTS> 3,558,920
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 20,219
<INTEREST-EXPENSE> 30,664
<INCOME-PRETAX> 335,558
<INCOME-TAX> 132,600
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 202,958
<EPS-PRIMARY> 2.47
<EPS-DILUTED> 2.47
</TABLE>
<PAGE>
Exhibit 13.1
1 NORDSTROM, INC. AND SUBSIDIARIES
Table of Contents
2 Financial Highlights
3 Message to our Shareholders
4 Management Discussion & Analysis
8 Consolidated Statements of Earnings
9 Consolidated Balance Sheets
10 Consolidated Statements of Shareholders' Equity
11 Consolidated Statements of Cash Flows
12 Notes to Consolidated Financial Statements
21 Report of Management
22 Independent Auditors' Report
23 Ten-Year Statistical Summary
25 Officers, Directors and Committees
29 Retail Store Facilities
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 94th year, Nordstrom operates 55 large specialty stores in Washington,
Oregon, California, Utah, Alaska, Virginia, Maryland, New Jersey, Illinois and
Minnesota, plus one smaller specialty store, 19 clearance and off-price
stores, a men's wear boutique in New York City, and leased shoe departments in
12 department stores in Hawaii and Guam. 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>
NORDSTROM, INC. AND SUBSIDIARIES 2
Financial Highlights
<TABLE>
Dollars in thousands except per share amounts
<CAPTION>
Fiscal Year 1994 1993 % Change
------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $3,894,478 $3,589,938 +8.5
Earnings before income taxes 335,558 230,918 +45.3
Net earnings 202,958 140,418 +44.5
Net earnings per share 2.47 1.71 +44.4
Cash dividends paid per share .385 .34 +13.2
</TABLE>
Stock Trading
<TABLE>
<CAPTION>
Fiscal Year 1994 Fiscal Year 1993
--------------------------------------------------------------------------
High Low High Low
<S> <C> <C> <C> <C>
1st Quarter 44 1/2 34 43 1/2 27 3/4
2nd Quarter 45 3/4 38 3/4 32 1/4 25 1/4
3rd Quarter 49 3/4 37 35 3/4 26 1/4
4th Quarter 49 1/2 39 1/2 36 1/2 31
</TABLE>
Nordstrom, Inc. common stock is traded over-the-counter and quoted daily in
leading financial publications. NASDAQ Symbol -- Nobe.
Graph - Net Sales
The vertical bar graph compares net sales for the past ten years. Beginning
with the most recent fiscal year on the left, net sales (dollars are in
millions) were as follows: 1994-$3,894; 1993-$3,590; 1992-$3,422; 1991-$3,180;
1990-$2,894; 1989-$2,671; 1988-$2,328; 1987-$1,920; 1986-$1,630; and 1985-
$1,302.
Graph - 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: 1994-$203.0; 1993-$140.4; 1992-$136.6; 1991-
$135.8; 1990-$115.8; 1989-$114.9; 1988-$123.3; 1987-$92.7; 1986-$72.9; and
1985-$50.1.
<PAGE>
3 NORDSTROM, INC. AND SUBSIDIARIES
Message to our Shareholders
Reviewing the 1994 year should be encouraging to people who are interested in
the Nordstrom company. The raw numbers tend to speak for themselves. Sales
rose to $3,894,478,000, representing an 8.5% increase, while profits set a
notable all-time high by rising to $202,958,000, a 44.5% increase. Part of the
vitality that we experienced in 1994 was due to the opening of successful new
stores at Annapolis Mall in Annapolis, MD; Santa Anita Fashion Park in
Arcadia, CA; and Old Orchard Center in Skokie, IL. In addition, we
significantly expanded two of our older units at Washington Square in
Portland, OR and Bellevue Square in Bellevue, WA.
Most of the credit for the results should go to the people who make up our
staff and management. They are the ones who have been implementing our
Inventory Management System that helped us achieve a much more efficient and
responsive stock of merchandise. We also had an aggressive expense control
effort that was supported by everyone. Finally, almost all of our merchandise
divisions lowered their markdowns which allowed us to improve our gross
margins. Our buyers operated with somewhat leaner inventories by effectively
targeting our customer base. We note that the women's apparel segment of the
retailing industry has not been doing well, but we are happy to report that
our women's apparel departments had significant increases in both sales and
profit margins.
We expect 1994 to be a good base from which to grow in 1995. The cost controls
and the merchandise disciplines that we enjoyed this past year should be
improved upon. While consumer demand is not rising in a major way, we think we
can capture a larger share of the market.
New stores will once again be the catalyst for our increased sales and the
growth of our culture. Here is the schedule for stores opening in 1995:
* March 3: Woodfield Shopping Center, Schaumburg, IL (215,000 sq. ft.)
* March 17: The Westchester, White Plains, NY (219,000 sq. ft.)
* August 18: The Mall at Short Hills, Millburn, NJ (188,000 sq. ft.)
* September 8: Circle Centre, Indianapolis, IN (216,000 sq. ft.)
* August 25: Auburn Super Mall Rack, Auburn, WA (51,000 sq. ft.)
We feel we are uniquely positioned to grow and prosper. The retail industry
is, as always, changing and it would appear that we have the financial
resources, outstanding human resources, desire and opportunities to become the
leading retailer of our type of merchandise in the country.
John A. McMillan
Bruce A. Nordstrom
James F. Nordstrom
John N. Nordstrom
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 4
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.
<TABLE>
<CAPTION>
Fiscal Year 1994 1993 1992
--------------------------------------------------------------------------
<S> <C> <C> <C>
Additional sales in comparable stores
(open at least fourteen months) 4.4% 2.7% 1.4%
Sales in new stores 4.1% 2.2% 6.2%
---- ---- ----
Total percentage increase 8.5% 4.9% 7.6%
==== ==== ====
</TABLE>
During the past three years, the rate of growth of comparable store sales has
increased as the overall economic climate has improved. This trend has been
most noticeable in California where many of the Company's stores are located.
New stores are generally not as productive as the Company's average store, due
to the established customer base and traffic patterns which develop over time.
As a result, sales growth from new stores has grown at a lower rate than
average square footage over the past several years.
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 1% for 1992, 1% for 1993 and -1% for 1994. These
statistics indicate that inflation has been very low over the past several
years, and management believes that they are the best available measure of the
effect of inflation on the Company's selling prices.
Graph - Percentage of 1994 Sales by Merchandise Category
The pie chart depicts each merchandise category and its percent of 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>
5 NORDSTROM, INC. AND SUBSIDIARIES
Management Discussion and Analysis
Costs and Expenses
As a result of increased sales, the total amount of costs and expenses has
increased in each year. As a percentage of sales, total costs and expenses
were 93.5% in 1992, 93.6% in 1993 and 91.4% in 1994. Unless otherwise
indicated, the changes discussed below are stated as a percentage of
sales as shown on page 8.
Cost of sales and related buying and occupancy costs fluctuate as a percentage
of sales primarily because of changes in the cost of sales component. With
the changes in merchandise styles and selections from season to season, cost
of sales, and therefore the merchandise gross margin, can fluctuate up and
down. In 1993, the merchandise gross margin decreased because of the softness
in demand for women's apparel. During 1994, the merchandise margin improved
dramatically because of higher than anticipated sales increases and
implementation of a new inventory management system. Nearly all categories of
merchandise had higher margins, but women's apparel showed the greatest
improvement following the low level in 1993. Buying costs increased during
the period, as the Company spent more to develop its own merchandise brands
and to develop and implement a new inventory management system.
Selling, general and administrative expenses increased by .2% of sales in 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 1992, management implemented programs to control these expenses,
and as a result, the rate of growth of these expenses slowed in 1993. At the
same time the growth in comparable store sales increased. Selling, general
and administrative expenses decreased by .2% of sales in 1993 primarily
because of a reduction in bad debts. Bad debts continued to decline in 1994.
Medical plan benefits also decreased in 1994 as a result of changes to the
plan implemented by the Company. These decreases were offset by higher sales
promotion costs for the Company's direct sales division and a higher
contribution to the Company's profit sharing plan.
In 1992 and 1993, interest expense decreased because of lower short-term
interest rates and reductions in debt outstanding. During 1994, interest
expense decreased as more interest was capitalized on projects under
construction.
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
had previously established a reserve for potential wage claims alleged in that
same lawsuit. The Company paid substantially all the claims by the end of
1993 and the resulting adjustment of the reserve amount increased other income
in the fourth quarter of 1993 by $4.5 million ($.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 expenses and property losses
resulting from an earthquake in Southern California. The Company does not
carry earthquake insurance because of its high cost.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 6
Management Discussion and Analysis
Income Taxes
The provision for income taxes increased in 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.
Liquidity and Capital Resources
During 1992 and 1993, cash provided by operating activities exceeded cash used
in investing activities as shown on page 11. The Company used this excess cash
flow to reduce total debt outstanding. This situation reversed in 1994 as the
Company increased its spending on new store construction and customer accounts
receivable increased.
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 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Operating working capital (in thousands) $843,924 $745,040 $765,893
Percentage change from prior year 13.3% (2.7%) 1.0%
-------- -------- --------
Net sales/average operating working capital 4.6 4.8 4.5
======== ======== ========
</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.
Operating working capital increased at a slower rate than sales in 1992, and
decreased in 1993, because of reduced customer accounts receivable. Credit
sales on the Company's credit card decreased, reflecting more cautious use of
credit by consumers in general and increased competition from third-party
cards. In 1994, customer accounts receivable increased because the Company
commenced its own Visa credit card program. The increase in customer accounts
receivable, along with higher merchandise inventories, caused operating
working capital to increase.
<PAGE>
7 NORDSTROM, INC. AND SUBSIDIARIES
Management Discussion and Analysis
Graph - 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>
1994 $230.4 $215.3
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)
</TABLE>
Liquidity and Capital Resources
The Company has spent $436 million during the last three years to add new
stores and facilities and to improve existing stores and facilities. Over 1.4
million square feet of selling space has been added during this time period,
representing an increase of 16%. 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 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 1995 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 1994, the Company's capital totaled $1,805 million. Because the Company has
experienced strong positive cash flows, total debt outstanding has decreased
over the past three years both 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.
Graph - Square Footage by Market Area at end of 1994
The pie chart shows the percent of total square feet in each region and also
gives the number of square feet for that region. Clockwise: Northern
California, 19.2%, 1,922,000; Washington, 13.8%, 1,374,000; Capital, 12.3%,
1,229,000; Oregon, 8.2%, 823,000; Northeast, 7.2%, 722,000; Midwest, 7.4%,
743,000; Utah, 3.6%, 357,000; Place Two and Clearance, .4%, 44,000; Alaska,
1.0%, 97,000 and Southern California, 26.9%, 2,687,000.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 8
Consolidated Statements of Earnings
<TABLE>
Dollars in thousands except per share amounts
<CAPTION>
% of % of % of
Year ended January 31, 1995 Sales 1994 Sales 1993 Sales
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $3,894,478 100.0 $3,589,938 100.0 $3,421,979 100.0
---------- ----- ---------- ----- ---------- -----
Costs and expenses:
Cost of sales and related
buying and occupancy 2,599,553 66.7 2,469,304 68.8 2,339,107 68.3
Selling, general and
administrative 1,023,347 26.3 940,579 26.2 902,083 26.4
Interest, net 30,664 .8 37,646 1.1 44,810 1.3
Service charge income
and other, net (94,644) (2.4) (88,509) (2.5) (86,140) (2.5)
---------- ----- ---------- ----- ---------- -----
Total costs and expenses 3,558,920 91.4 3,359,020 93.6 3,199,860 93.5
---------- ----- ---------- ----- ---------- -----
Earnings before income taxes 335,558 8.6 230,918 6.4 222,119 6.5
Income taxes 132,600 3.4 90,500 2.5 85,500 2.5
---------- ----- ---------- ----- ---------- -----
Net earnings $ 202,958 5.2 $ 140,418 3.9 $ 136,619 4.0
========== ===== ========== ===== ========== =====
Net earnings per share $ 2.47 $ 1.71 $ 1.67
========== ========== ==========
Cash dividends paid per share $ .385 $ .34 $ .32
========== ========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
<PAGE>
9 NORDSTROM, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Dollars in thousands
January 31, 1995 1994
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 32,497 $ 91,222
Accounts receivable, net 675,891 586,441
Merchandise inventories 627,930 585,602
Prepaid income taxes and other 61,395 51,649
---------- ----------
Total current assets 1,397,713 1,314,914
Property, buildings and equipment, net 984,195 845,596
Other assets 14,875 16,971
---------- ----------
Total assets $2,396,783 $2,177,481
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 87,388 $ 40,337
Accounts payable 273,084 264,055
Accrued salaries, wages and taxes 190,501 156,947
Accrued expenses 40,990 35,994
Accrued income taxes 22,524 27,988
Current portion of long-term debt 75,967 102,164
---------- ----------
Total current liabilities 690,454 627,485
Long-term debt 297,943 336,410
Deferred income taxes and other 64,586 47,082
Shareholders' equity 1,343,800 1,166,504
---------- ----------
Total liabilities and shareholders' equity $2,396,783 $2,177,481
========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 10
Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Dollars in thousands except per share amounts
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock
Authorized 250,000,000 shares; issued and outstanding
82,244,098, 82,059,128 and 81,974,797 shares
Balance at beginning of year $ 157,374 $ 155,439 $ 153,055
Issuance of common stock 5,960 1,935 2,384
---------- ---------- ----------
Balance at end of year 163,334 157,374 155,439
---------- ---------- ----------
Retained Earnings
Balance at beginning of year 1,009,130 896,592 786,176
Net earnings 202,958 140,418 136,619
Cash dividends paid ($.385, $.34, and $.32 per share) (31,622) (27,880) (26,203)
---------- ---------- ----------
Balance at end of year 1,180,466 1,009,130 896,592
---------- ---------- ----------
Total shareholders' equity $1,343,800 $1,166,504 $1,052,031
========== ========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
<PAGE>
11 NORDSTROM, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Dollars in thousands
Year ended January 31, 1995 1994 1993
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net earnings $202,958 $140,418 $136,619
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 110,789 103,466 102,763
Change in:
Accounts receivable, net (89,450) 16,757 5,029
Merchandise inventories (42,328) (48,863) (30,107)
Prepaid income taxes and other (9,746) (878) (2,643)
Accounts payable 9,029 43,879 3,744
Accrued salaries, wages and taxes 33,554 (1,081) 12,236
Accrued expenses 4,996 4,853 (600)
Income tax liabilities (4,518) 3,540 8,586
-------- -------- --------
Net cash provided by operating activities 215,284 262,091 235,627
-------- -------- --------
Investing Activities
Additions to property, buildings and equipment, net (232,050) (124,401) (69,982)
Other, net 1,660 (8,306) (1,870)
-------- -------- --------
Net cash used in investing activities (230,390) (132,707) (71,852)
-------- -------- --------
Financing Activities
Increase (decrease) in notes payable 47,051 2,018 (96,416)
Proceeds from issuance of long-term debt, net 49,656 - -
Principal payments on long-term debt (114,664) (43,371) (29,055)
Proceeds from issuance of common stock 5,960 1,935 2,384
Cash dividends paid (31,622) (27,880) (26,203)
-------- -------- --------
Net cash used in financing activities (43,619) (67,298) (149,290)
-------- -------- --------
Net (decrease) increase in cash and cash equivalents (58,725) 62,086 14,485
Cash and cash equivalents at beginning of year 91,222 29,136 14,651
-------- -------- --------
Cash and cash equivalents at end of year $ 32,497 $ 91,222 $ 29,136
======== ======== ========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 12
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.
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,
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.
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 82,144,079, 82,003,407 and 81,892,829 in 1994, 1993
and 1992.
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, 1995 and 1994 include $29,223 and $15,817
of checks drawn in excess of cash balances not yet presented for payment.
<PAGE>
13 NORDSTROM, INC. AND SUBSIDIARIES
Derivatives: The Company limits its use of derivative financial instruments
to the management of well-defined foreign currency and interest rate risks.
The effect of these activities is not material to the Company's financial
condition or results of operations. The Company has no off-balance sheet
credit risk, and the fair value of derivative financial instruments at January
31, 1995 and 1994 is not material.
NOTE 2: EMPLOYEE BENEFITS
The Company provides a profit sharing plan for employees. The plan is fully
funded by the Company and is non-contributory except for employee
contributions made under Section 401(k) of the Internal Revenue Code. Under
this provision, the Company provides matching contributions up to a stipulated
percentage of employee contributions. The Company contribution is established
each year by the Board of Directors and totaled $44,000, $35,500 and $34,000
for 1994, 1993 and 1992.
NOTE 3: INTEREST EXPENSE
The components of interest expense are as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Nordstrom, Inc.
Short-term debt $ 69 $ 46 $ 799
Long-term debt 10,780 12,830 14,084
Nordstrom Credit, Inc.
Short-term debt 5,085 2,361 4,474
Long-term debt 23,161 25,543 28,906
------- ------- -------
Total interest incurred 39,095 40,780 48,263
Less: Interest income (2,416) (1,624) (1,161)
Capitalized interest (6,015) (1,510) (2,292)
------- ------- -------
Interest, net $30,664 $37,646 $44,810
======= ======= =======
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 14
NOTE 4: INCOME TAXES
Income taxes consist of the following:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
-------------------------------------------------------------------------
<S> <C> <C> <C>
Current income taxes:
Federal $118,558 $77,231 $71,181
State and local 23,986 16,149 14,931
-------- ------- -------
Total current income taxes 142,544 93,380 86,112
-------- ------- -------
Deferred income taxes:
Current (10,113) (648) (3,588)
Non-current 169 (2,232) 2,976
-------- ------- -------
Total deferred income taxes (9,944) (2,880) (612)
-------- ------- -------
Total income taxes $132,600 $90,500 $85,500
======== ======= =======
</TABLE>
A reconciliation of the statutory Federal income tax rate with the
effective tax rate is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.00% 35.00% 34.00%
State and local income taxes, net
of Federal income taxes 4.39 4.41 4.38
Other, net .11 (0.21) 0.11
------- ------- -------
Effective tax rate 39.50% 39.20% 38.49%
======= ======= =======
</TABLE>
Deferred income taxes result from temporary differences in the timing of
recognition of revenue and expenses for tax and financial statement
reporting as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Excess tax basis depreciation $ 521 $ 740 $2,342
Accrued expenses (4,416) (2,850) (3,039)
Other (6,049) (770) 85
------- ------- -------
Total deferred income taxes ($9,944) ($2,880) ($ 612)
======= ======= =======
</TABLE>
These items comprise substantially all of the deferred tax asset and liability
balances.
<PAGE>
15 NORDSTROM, INC. AND SUBSIDIARIES
NOTE 5: ACCOUNTS RECEIVABLE
The components of accounts receivable are as follows:
<TABLE>
<CAPTION>
January 31, 1995 1994
------------------------------------------------------------------------
<S> <C> <C>
Customers $678,673 $588,296
Other 20,176 21,290
Allowance for doubtful accounts (22,958) (23,145)
-------- --------
Accounts receivable, net $675,891 $586,441
======== ========
</TABLE>
Credit risk with respect to accounts receivable is concentrated in the
geographic regions in which the Company operates stores. At January 31, 1995
and 1994, 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 $20,219, $25,713 and $29,469 for 1994, 1993 and 1992.
NOTE 6: PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consist of the following (at cost):
<TABLE>
<CAPTION>
January 31, 1995 1994
------------------------------------------------------------------------
<S> <C> <C>
Land and land improvements $ 42,355 $ 41,810
Buildings 423,342 404,910
Leasehold improvements 520,729 471,293
Store fixtures and equipment 595,288 510,789
---------- ----------
1,581,714 1,428,802
Less accumulated depreciation
and amortization (746,712) (654,026)
---------- ----------
835,002 774,776
Construction in progress 149,193 70,820
---------- ----------
Property, buildings and equipment, net $ 984,195 $ 845,596
========== ==========
</TABLE>
At January 31, 1995 the Company had contractual commitments of approximately
$125,366 for construction of new stores.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 16
NOTE 7: NOTES PAYABLE
A summary of notes payable is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Average daily short-term
borrowings $106,092 $ 76,779 $141,979
Maximum amount outstanding 209,605 117,023 186,038
Weighted average interest rate:
During the year 4.9% 3.1% 3.7%
At year-end 6.0% 3.1% 3.1%
</TABLE>
The carrying amount of notes payable approximates fair value because of the
short maturity of these instruments.
At January 31, 1995, Nordstrom Credit, Inc. had unsecured lines of credit with
commercial banks totaling $225,000 which are available as liquidity support
for short-term debt, and expire in June 1995 and January 1998. Nordstrom
Credit, Inc. pays commitment fees for the lines in lieu of compensating
balance requirements.
NOTE 8: LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
January 31, 1995 1994
------------------------------------------------------------------------
<S> <C> <C>
Senior notes, 8.875%-9%, due 1995-1998 $100,000 $150,000
Medium-term notes,
Nordstrom Credit, Inc.,
7.83%-9.6%, due 1995-2001 209,000 210,000
Sinking fund debentures,
Nordstrom Credit, Inc., 9.375%, due 2016,
payable in annual installments of $3,750
beginning in 1997 43,100 55,600
Other 21,810 22,974
-------- --------
Total long-term debt 373,910 438,574
Less current portion (75,967) (102,164)
-------- --------
Total due beyond one year $297,943 $336,410
======== ========
</TABLE>
<PAGE>
17 NORDSTROM, INC. AND SUBSIDIARIES
The senior note agreements contain restrictive covenants which, among other
things, restrict dividends to shareholders to a formula amount. At January
31, 1995, approximately $664,290 of retained earnings was not restricted.
Aggregate principal payments on long-term debt are as follows: 1995-$75,967;
1996-$74,210; 1997-$55,053; 1998-$105,183 and 1999-$5,076.
The fair value of long-term debt, estimated using quoted market prices of the
same or similar issues with the same remaining maturity, was approximately
$381,000 and $478,000 at January 31, 1995 and 1994.
NOTE 9: LEASES
The Company leases land, buildings and equipment under non-cancelable lease
agreements with expiration dates ranging from 1995 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, 1995 are as follows: 1995-
$27,972; 1996-$27,116; 1997-$26,358; 1998-$25,298; 1999-$24,324; and
thereafter -$201,418.
The following is a schedule of rent expense:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rent:
Store locations $16,467 $14,899 $14,719
Offices, warehouses and equipment 18,336 19,390 17,660
Contingent rent:
Store location percentage rent 14,078 13,964 13,398
Common area costs, taxes and other 8,860 8,692 8,105
------- ------- -------
Total rent expense $57,741 $56,945 $53,882
======= ======= =======
</TABLE>
NOTE 10: 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 option
grants is 869,334.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 18
A summary of stock option activity follows:
<TABLE>
<CAPTION>
Range of prices
Shares per share
------------------------------------------------------------------------
<S> <C> <C>
Outstanding, February 1, 1994 1,732,464 $ 7.44-$43.25
Granted 345,770 43.88- 48.25
Exercised (182,662) 7.44- 43.25
Cancelled (17,322) 22.00- 43.88
--------- -------------
Outstanding, January 31, 1995 1,878,250 $12.88-$48.25
========= =============
Exercisable, January 31, 1995 964,023 $12.88-$43.25
========= =============
</TABLE>
NOTE 11: SUPPLEMENTARY CASH FLOW INFORMATION
Supplementary cash flow information includes the following:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Interest (net of capitalized
interest) $ 34,520 $41,122 $47,994
Income taxes 146,590 86,485 79,740
</TABLE>
NOTE 12: CREDIT CARD AND FINANCING SUBSIDIARIES
Nordstrom National Credit Bank (the Bank), a wholly owned subsidiary, issues a
credit card for use in Company stores, and in 1994 introduced a VISA card.
Nordstrom Credit, Inc., a wholly owned subsidiary, finances all receivables
generated through the use of these credit cards. Servicing of the receivables
is performed by the Bank. At January 31, 1995, net VISA receivables totaled
$85,211.
<PAGE>
19 NORDSTROM, INC. AND SUBSIDIARIES
Condensed combined financial information of the subsidiaries is as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
Service charge income $ 92,591 $91,026 $92,553
Other income 12,525 5,086 4,121
-------- ------- -------
Total revenue $105,116 $96,112 $96,674
======== ======= =======
Net earnings $ 23,019 $22,209 $19,699
======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
January 31, 1995 1994
------------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and cash equivalents $ 24,286 $ 21,972
Accounts receivable, net 655,427 564,605
Other assets 7,650 8,527
-------- --------
Total assets $687,363 $595,104
======== ========
Liabilities and investment of Nordstrom, Inc.:
Notes Payable:
Nordstrom, Inc. $148,000 $112,500
Other 87,388 40,337
Accounts payable and accrued liabilities 21,091 20,902
Long-term debt 252,100 265,600
Investment of Nordstrom, Inc. 178,784 155,765
-------- --------
Total liabilities and investment
of Nordstrom, Inc. $687,363 $595,104
======== ========
</TABLE>
<PAGE>
20 NORDSTROM, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE 13: SELECTED QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
Year ended January 31, 1995 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $762,062 $1,079,501 $861,968 $1,190,947 $3,894,478
Gross profit 251,927 355,841 292,656 394,501 1,294,925
Earnings before income taxes 52,773 104,223 63,079 115,483 335,558
Net earnings 31,973 63,023 38,079 69,883 202,958
Earnings per share .39 .77 .46 .85 2.47
Dividends per share .085 .10 .10 .10 .385
Year ended January 31, 1994 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
--------------------------------------------------------------------------------------------------------
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
<PAGE>
21 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 LLP, 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 22
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheets of Nordstrom,
Inc. and subsidiaries as of January 31, 1995 and 1994, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the three years in the period ended January 31, 1995. 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, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended January 31, 1995,
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Seattle, Washington; March 10, 1995
<PAGE>
23 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, 1995 1994 1993 1992 1991
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Position
Customer accounts receivable, net $ 655,715 $ 565,151 $ 584,379 $ 585,490 $558,573
Merchandise inventories 627,930 585,602 536,739 506,632 448,344
Current assets 1,397,713 1,314,914 1,219,844 1,177,638 1,090,379
Current liabilities 690,454 627,485 511,196 553,903 551,835
Working capital 707,259 687,429 708,648 623,735 538,544
Working capital ratio 2.02 2.10 2.39 2.13 1.98
Property, buildings and equipment, net 984,195 845,596 824,142 856,404 806,191
Long-term debt 373,910 438,574 481,945 511,000 489,172
Debt/capital ratio 25.56 29.11 33.09 40.74 43.59
Shareholders' equity 1,343,800 1,166,504 1,052,031 939,231 826,410
Shares outstanding 82,244,098 82,059,128 81,974,797 81,844,227 81,737,910
Book value per share 16.34 14.22 12.83 11.48 10.11
Total assets 2,396,783 2,177,481 2,053,170 2,041,875 1,902,589
Operations
Net sales 3,894,478 3,589,938 3,421,979 3,179,820 2,893,904
Costs and expenses:
Cost of sales and related
buying and occupancy 2,599,553 2,469,304 2,339,107 2,169,437 2,000,250
Selling, general and administrative 1,023,347 940,579 902,083 831,505 747,770
Interest, net 30,664 37,646 44,810 49,106 52,228
Service charge income and other, net (94,644) (88,509) (86,140) (87,443) (84,660)
Total costs and expenses 3,558,920 3,359,020 3,199,860 2,962,605 2,715,588
Earnings before income taxes 335,558 230,918 222,119 217,215 178,316
Income taxes 132,600 90,500 85,500 81,400 62,500
Net earnings 202,958 140,418 136,619 135,815 115,816
Earnings per share 2.47 1.71 1.67 1.66 1.42
Dividends per share .385 .34 .32 .31 .30
Net earnings as a percent of net sales 5.21% 3.91% 3.99% 4.27% 4.00%
Return on average shareholders' equity 16.17% 12.66% 13.72% 15.38% 14.85%
Sales per square foot for Company-
operated stores 395 383 381 388 391
Stores and Facilities
Company-operated stores 76 74 72 68 63
Total square footage 9,998,000 9,282,000 9,224,000 8,590,000 7,655,000
</TABLE>
<PAGE>
24 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, 1990 1989 1988 1987 1986
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Position
Customer accounts receivable, net $ 519,656 $ 465,929 $ 391,387 $ 344,045 $ 296,030
Merchandise inventories 419,976 403,795 312,696 257,334 226,017
Current assets 1,011,148 913,986 730,182 645,326 546,756
Current liabilities 489,888 448,165 394,699 324,697 339,503
Working capital 521,260 465,821 335,483 320,629 207,253
Working capital ratio 2.06 2.04 1.85 1.99 1.61
Property, buildings and equipment, net 691,937 594,038 502,661 424,228 397,380
Long-term debt 468,412 389,216 260,343 271,054 276,419
Debt/capital ratio 43.78 43.12 39.57 41.57 56.41
Shareholders' equity 733,250 639,941 533,209 451,196 314,119
Shares outstanding 81,584,710 81,465,027 81,371,106 80,981,722 74,504,392
Book value per share 8.99 7.86 6.55 5.57 4.22
Total assets 1,707,420 1,511,703 1,234,267 1,071,124 945,880
Operations
Net sales 2,671,114 2,327,946 1,920,231 1,629,918 1,301,857
Costs and expenses:
Cost of sales and related
buying and occupancy 1,829,383 1,563,832 1,300,720 1,095,584 893,874
Selling, general and administrative 669,159 582,973 477,488 408,664 326,758
Interest, net 49,121 39,977 32,952 34,910 30,482
Service charge income and other, net (55,958) (57,268) (53,662) (49,479) (36,636)
Total costs and expenses 2,491,705 2,129,514 1,757,498 1,489,679 1,214,478
Earnings before income taxes 179,409 198,432 162,733 140,239 87,379
Income taxes 64,500 75,100 70,000 67,300 37,300
Net earnings 114,909 123,332 92,733 72,939 50,079
Earnings per share 1.41 1.51 1.13 .91 .65
Dividends per share .28 .22 .18 .13 .11
Net earnings as a percent of net sales 4.30% 5.30% 4.83% 4.48% 3.85%
Return on average shareholders' equity 16.74% 21.03% 18.84% 19.06% 17.10%
Sales per square foot for Company-
operated stores 398 380 349 322 293
Stores and Facilities
Company-operated stores 59 58 56 53 52
Total square footage 6,898,000 6,374,000 5,527,000 5,098,000 4,727,000
</TABLE>
<PAGE>
25 NORDSTROM INC. AND SUBSIDIARIES
Officers, Directors and Committees
<TABLE>
<CAPTION>
Officers
<S> <C> <C> <C>
Jammie Baugh 41 Executive Vice President Southern California
General Manager
Gail A. Cottle 43 Executive Vice President Product Development
Dale C. Crichton 46 Vice President Cosmetics and Gift
Gallery Merchandise
Manager
Joseph V. Demarte 43 Vice President Personnel
Annette S. Dresser 34 Vice President Individualist and
Petite Focus
Merchandise Manager
Charles L. Dudley 44 Vice President Human Resources
John A. Goesling 49 Executive Vice President Finance
and Treasurer
Tamela J. Hickel 34 Vice President Oregon General Manager
Darrel J. Hume 47 Vice President Men's Sportswear
Merchandise Manager
Jack F. Irving 50 Executive Vice President Men's Wear Merchandise
Manager
Raymond A. Johnson 53 Co-President
Cody K. Kondo 39 Vice President Northeast General
Manager
David P. Lindsey 45 Vice President Store Planning
David L. Mackie 46 Vice President Real Estate
Robert J. Middlemas 38 Vice President Midwest General
Manager
Blake W. Nordstrom 34 Vice President Washington and Alaska
General Manager
James A. Nordstrom 33 Vice President Northern California
General Manager
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 26
<TABLE>
<S> <C> <C> <C>
Robert T. Nunn 55 Executive Vice President Shoe Merchandise
Manager
Cynthia C. Paur 44 Executive Vice President Better Apparel
Merchandise Manger
Karen E. Purpur 51 Secretary
John J. Whitacre 42 Co-President
Martha S. Wikstrom 38 Vice President Capital General
Manager
</TABLE>
<PAGE>
27 NORDSTROM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Directors
<S> <C> <C> <C>
Philip M. Condit 53 Director President, The Boeing Company,
Seattle, WA
D. Wayne Gittinger 62 Director Partner, Lane Powell Spears
Lubersky, Seattle, WA
John F. Harrigan 69 Director Retired Chairman, Union Bank,
Los Angeles, CA
Charles A. Lynch 67 Director Chairman, Market Value Partners
Company, Menlo Park, CA
Ann D. McLaughlin 53 Director President, Federal City Council,
Washington, D.C. and Vice
Chairman, The Aspen Institute,
Aspen, CO
John A. McMillan 63 Co-Chairman of the Board of Directors
Bruce A. Nordstrom 61 Co-Chairman of the Board of Directors
James F. Nordstrom 55 Co-Chairman of the Board of Directors
John N. Nordstrom 57 Co-Chairman of the Board of Directors
Alfred E. Osborne, Jr. 50 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 62 Director Chairman of the Board and Chief
Executive Officer,
Browning-Ferris Industries,
Inc., Houston, TX
Malcolm T. Stamper 69 Director Publisher, Chairman and Chief
Executive Officer,
Storytellers, Ink., Seattle, WA
Elizabeth Crownhart Vaughan 66 Director President, Salar Enterprises,
Portland, OR
</TABLE>
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES 28
Committees
EXECUTIVE
John A. McMillan
Bruce A. Nordstrom, Co-Chair
James F. Nordstrom
John N. Nordstrom, Co-Chair
AUDIT
Philip M. Condit
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
Philip M. Condit
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 29
Retail Store Facilities
<TABLE>
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 12 department stores in Hawaii and Guam. In
addition, the Company operates seven distribution centers and leases other space for administrative
functions.
<CAPTION>
Present Year Present
Year opened total store opened or total store
Location or acquired area/sq. ft. Location 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 134,000 Stanford Shopping Center 1984 187,000
Bellevue Square 1967 285,000 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
Bellis Fair Rack 1990 20,000 Marina Square Rack 1990 44,000
OREGON GROUP UTAH GROUP
Lloyd Center 1963 150,000 Crossroads Plaza 1980 140,000
Downtown Portland 1966 174,000 Fashion Place Mall 1981 110,000
Washington Square 1974 189,000 Ogden City Mall 1982 76,000
Vancouver Mall 1977 71,000 Sugarhouse Center Rack 1991 31,000
Salem Centre 1980 71,000
Clackamas Town Center 1981 121,000 CAPITAL GROUP
Clackamas Rack 1983 28,000 Tysons Corner Center 1988 239,000
Downtown Portland Rack 1986 19,000 The Fashion Centre at
Pentagon City 1989 241,000
<PAGE>
31 NORDSTROM, INC. AND SUBSIDIARIES
SOUTHERN CALIFORNIA GROUP Potomac Mills Rack 1990 46,000
South Coast Plaza 1978 235,000 Montgomery Mall 1991 225,000
Brea Mall 1979 195,000 City Place Rack 1992 37,000
Los Cerritos Center 1981 122,000 Towson Town Center 1992 205,000
Fashion Valley Mall 1981 156,000 Towson Rack 1992 31,000
Glendale Galleria 1983 147,000 Franklin Mills Rack 1993 43,000
Santa Ana Rack 1983 22,000 Annapolis Mall 1994 162,000
Topanga Plaza 1984 154,000
University Towne Centre 1984 130,000 NORTHEAST GROUP
Woodland Hills Rack 1984 48,000 Garden State Plaza 1990 272,000
The Galleria at South Bay 1985 161,000 Menlo Park Mall 1991 266,000
Westside Pavilion 1985 150,000 Freehold Raceway Mall 1992 174,000
Horton Plaza 1985 151,000 Faconnable 1993 10,000
Mission Valley Rack 1985 27,000
Montclair Plaza 1986 133,000 MIDWEST GROUP
North County Fair 1986 156,000 Oakbrook Center 1991 249,000
MainPlace Mall 1987 169,000 Mall of America 1992 240,000
Chino Town Square Rack 1987 30,000 Old Orchard 1994 209,000
Paseo Nuevo 1990 186,000 Woodfield Rack 1994 45,000
The Galleria at Tyler 1991 164,000
Santa Anita 1994 151,000 PLACE TWO AND CLEARANCE
STORES
ALASKA GROUP Washington and Arizona(2) 44,000
Anchorage 1975 97,000
<FN>
(1) Excludes approximately 23,000 square feet of corporate and administrative
offices.
(2) Includes one Place Two store and one clearance store.
</TABLE>
<PAGE>
Shareholder Information
Independent Auditors
Deloitte & Touche LLP
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 16, 1995 at 11:00 a.m. Pacific Time
Sheraton Seattle Hotel and Towers
Seattle, Washington
Form 10-K
The Company's Annual Report to the Securities and Exchange Commission on Form
10-K for the year ended January 31, 1995 will be provided to shareholders upon
written request to: Investors Relations, Nordstrom, Inc., P.O. Box 2737,
Seattle, WA 98111 or by calling (206) 233-6301.
Shareholder Information Line
In order to provide our shareholders with information about the Company in a
more timely manner, as well as to reduce paper use, we will be establishing a
shareholder information line. We will no longer be mailing quarterly
shareholder reports. Effective April 14, 1995, shareholders will be able to
obtain the latest financial releases and updates as soon as they are
available, by dialing 1-800-667-3920.
<PAGE>
NORDSTROM, INC. AND SUBSIDIARIES
Appendix
<TABLE>
<CAPTION>
Graph Page
------------------------------------------------ ----
<S> <C>
Net Sales 2
Net Earnings 2
Percentage of 1994 Sales by Merchandise Category 4
Investing and Operating Cash Flows 7
Square Footage by Market Area at end of 1994 7
</TABLE>
