<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_______ to _________
Commission File Number 0-12994
Nordstrom Credit, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Colorado 91-1181301
_______________________________ __________________
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
13531 East Caley, Englewood, Colorado 80111
____________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 303-397-4700
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
_____ _____
On August 19, 1994 Registrant had 10,000 shares of Common stock
($.50 par value) outstanding; all such shares are owned by Registrant's
parent, Nordstrom, Inc.
The Registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this
form with the reduced disclosure format.
page 1 of 7
<PAGE>
NORDSTROM CREDIT, INC.
----------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Statements of Earnings
Three and six months ended July 31, 1994
and 1993 3
Balance Sheets
July 31, 1994 and 1993
and January 31, 1994 4
Statements of Cash Flows
Six months ended July 31, 1994
and 1993 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
</TABLE>
page 2 of 7
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended July 31, Ended July 31,
------------------ ------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Service charge income $21,763 $22,133 $44,489 $45,597
Expenses:
Interest, net 7,040 7,220 13,922 14,715
Service fees paid to
Nordstrom National
Credit Bank 7,798 8,699 13,060 14,588
General and
Administrative 482 416 896 818
-------- -------- -------- --------
Total expenses 15,320 16,335 27,878 30,121
-------- -------- -------- --------
Earnings before
income taxes 6,443 5,798 16,611 15,476
Income taxes 2,340 2,125 6,000 5,570
-------- -------- -------- --------
Net earnings $ 4,103 $ 3,673 $10,611 $ 9,906
======== ======== ======== ========
Ratio of earnings
available for fixed
charges to fixed charges 1.91 1.80 2.19 2.05
======== ======== ======== ========
</TABLE>
These statements should be read in conjunction with the Notes to
Financial Statements contained herein and in the Nordstrom
Credit, Inc. Annual Report on Form 10-K for the year ended
January 31, 1994.
page 3 of 7
<PAGE>
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
July 31, January 31, July 31,
1994 1994 1993
-------- ----------- --------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 556 $ 1,694 $ 9,185
Customer accounts receivable
net of holdback allowance
of $24,665, $23,145 and
$25,265 610,955 564,495 593,557
Other accounts receivable - 3,977 27
Property and equipment, net 5,815 5,987 6,009
Other assets 1,538 1,677 1,815
-------- ----------- --------
$618,864 $577,830 $610,593
======== =========== ========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- ---------------------------------------------
Notes payable to
Nordstrom, Inc. $ 96,000 $112,500 $ 87,500
Commercial paper 75,739 15,337 62,971
Notes payable to banks 40,000 25,000 25,000
Accrued interest, taxes
and other 22,186 9,665 15,560
Long-term debt 224,600 265,600 280,600
-------- ----------- --------
Total liabilities 458,525 428,102 471,631
Investment of
Nordstrom, Inc. 160,339 149,728 138,962
-------- ----------- --------
$618,864 $577,830 $610,593
======== =========== ========
</TABLE>
These statements should be read in conjunction with the Notes to
Financial Statements contained herein and in the Nordstrom
Credit, Inc. Annual Report on Form 10-K for the year ended
January 31, 1994.
page 4 of 7
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months
Ended July 31,
----------------------
1994 1993
-------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 10,611 $ 9,906
Adjustments to reconcile net earnings
to net cash (used in) provided by
operating activities:
Depreciation and amortization 311 313
Change in:
Customer accounts receivable (46,460) (10,346)
Other accounts receivable 3,977 3,681
Accrued interest, taxes and other 12,521 5,591
-------- -------
Net cash (used in) provided by
operating activities (19,040) 9,145
-------- -------
FINANCING ACTIVITIES:
Increase in commercial paper 60,402 49,652
Increase in notes payable to banks 15,000 -
Decrease in notes payable
to Nordstrom, Inc. (16,500) (25,000)
Principal payments on long-term debt (41,000) (25,000)
-------- -------
Net cash provided by (used in)
financing activities 17,902 (348)
-------- -------
Net (decrease) increase in cash and
and cash equivalents (1,138) 8,797
Cash and cash equivalents
at beginning of period 1,694 388
-------- -------
Cash and cash equivalents at end of period $ 556 $ 9,185
======== =======
</TABLE>
These statements should be read in conjunction with the Notes to
Financial Statements contained herein and in the Nordstrom
Credit, Inc. Annual Report on Form 10-K for the year ended
January 31, 1994.
page 5 of 7
<PAGE>
NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Note 1:
The balance sheets of Nordstrom Credit, Inc. as of July 31, 1994 and
1993, and the related statements of earnings and cash flows for the
periods then ended, have been prepared from the accounts without audit.
The financial information is applicable to interim periods and is not
necessarily indicative of the results to be expected for the year ending
January 31, 1995.
It is not considered necessary to include detailed footnote information
as of July 31, 1994 and 1993. The financial statements should be read
in conjunction with the Notes to Financial Statements contained in the
Nordstrom Credit, Inc. Annual Report on Form 10-K for the year ended
January 31, 1994.
In the opinion of management, the financial information includes all
adjustments (consisting only of normal, recurring adjustments) necessary
to present fairly the financial position of Nordstrom Credit, Inc. as of
July 31, 1994 and 1993, and the results of its operations and cash flows
for the periods then ended, in accordance with generally accepted
accounting principles applied on a consistent basis.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Service charge income decreased for the quarter and the six month period
when compared to the same periods in 1993, due to lower levels of
accounts receivable outstanding and a decrease in the average yield on
the receivables portfolio.
Interest expense decreased for the quarter and the six month period when
compared to the same periods in 1993, due to lower levels of debt. The
decrease was partially offset by an increase in rates.
Service fees paid to Nordstrom National Credit Bank (the "Bank")
decreased for the quarter and the six month period when compared to the
same periods in 1993, due primarily to a decrease in the servicing fee
rate from 1.82% to 1.59%, effective November 1, 1993.
In May 1994, the Bank commenced its VISA card program. Receivables
generated through the use of the card are purchased by the Company
without recourse, except for transactions occurring at Nordstrom, Inc.
stores. This is expected to increase the external financing needs of
the Company. Service charges earned on these receivables are expected
to be sufficient to offset additional expenses generated through this
activity. All other operations of the Company remain substantially the
same.
page 6 of 7
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
(27.1) Financial Data Schedule is filed herein as an Exhibit.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORDSTROM CREDIT, INC.
(Registrant)
/s/ John A. Goesling
__________________________________________
John A. Goesling, Executive Vice President
and Treasurer
(Principal Financial and Accounting Officer)
Date: September 2, 1994
_______________________
page 7 of 7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JUL-31-1994
<CASH> 556
<SECURITIES> 0
<RECEIVABLES> 610,955
<ALLOWANCES> 24,665
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,815
<DEPRECIATION> 0
<TOTAL-ASSETS> 618,864
<CURRENT-LIABILITIES> 0
<BONDS> 224,600
<COMMON> 0
0
0
<OTHER-SE> 160,339
<TOTAL-LIABILITY-AND-EQUITY> 618,864
<SALES> 0
<TOTAL-REVENUES> 44,489
<CGS> 0
<TOTAL-COSTS> 27,878
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,922
<INCOME-PRETAX> 16,611
<INCOME-TAX> 6,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,611
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
