<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 April 30, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______ to _________
Commission File Number 0-12994
Nordstrom Credit, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Colorado 91-1181301
______________________________ ________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
13531 East Caley, Englewood, Colorado 80111
____________________________________________________
(Address of principal executive 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 May 27, 1996 Registrant had 10,000 shares of Common stock ($.50
par value) outstanding; all such shares are owned by Registrant's parent,
Nordstrom, Inc.
The Registrant meets the conditions set forth in General Instruction
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 months ended April 30, 1996
and 1995 3
Balance Sheets
April 30, 1996 and 1995
and January 31, 1996 4
Statements of Cash Flows
Three months ended April 30, 1996
and 1995 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
Ended April 30,
-------------------
1996 1995
------- -------
<S> <C> <C>
Service charge income $35,716 $26,317
Rental income from Nordstrom
National Credit Bank 261 261
------- -------
Total Revenue 35,977 26,578
Expenses:
Interest, net 10,812 8,755
Service fees paid to Nordstrom
National Credit Bank 6,517 6,202
Bad debts 3,271 590
Other general and administrative 372 352
------- -------
Total expenses 20,972 15,899
------- -------
Earnings before income taxes
and extraordinary item 15,005 10,679
Income taxes 5,500 3,840
------- -------
Earnings before extraordinary item 9,505 6,839
Extraordinary charge related to the
early extinguishment of debt, net
of income taxes of $900 1,452 -
------- -------
Net earnings $ 8,053 $ 6,839
======= =======
Ratio of earnings
available for fixed
charges to fixed charges 2.13 2.22
======= =======
<FN>
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, 1996.
</TABLE>
page 3 of 7
<PAGE>
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
April 30, January 31, April 30,
1996 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 202 $ 91 $ 134
Customer accounts
receivable net of
holdback allowance
of $26,074, $29,393 and
$21,352 844,932 874,858 650,285
Other accounts receivable 2,469 7,217 -
Property and equipment, net 5,316 5,396 5,606
Other assets 3,919 2,122 1,544
-------- ---------- ---------
$856,838 $889,684 $657,569
======== ========== =========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- --------------------------------------------
<S> <C> <C> <C>
Notes payable to
Nordstrom, Inc. $ 37,000 $ 86,000 $ 22,100
Notes payable to bank 50,000 50,000 50,000
Commercial paper 228,423 182,501 108,582
Accrued interest, taxes
and other 14,703 9,424 15,775
Long-term debt 326,000 369,100 284,100
-------- ---------- ---------
Total liabilities 656,126 697,025 480,557
Investment of
Nordstrom, Inc. 200,712 192,659 177,012
-------- ---------- ---------
$856,838 $889,684 $657,569
======== ========== =========
<FN>
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, 1996.
</TABLE>
page 4 of 7
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended April 30,
-----------------
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Earnings before extraordinary item $ 9,505 $ 6,839
Adjustments to reconcile earnings
to net cash provided by (used in)
operating activities:
Extraordinary charge related to early
extinguishment of debt, net of
income taxes of $900 (1,452) -
Depreciation and amortization 586 176
Change in:
Other accounts receivable 4,748 4,807
Other assets (2,303) -
Accrued interest, taxes and other 5,279 4,812
-------- -------
Net cash provided by operating activities 16,363 16,634
-------- -------
INVESTING ACTIVITIES:
Decrease in investment in
customer accounts receivable, net 29,926 5,978
-------- -------
Net cash provided by investing activities 29,926 5,978
-------- ------
FINANCING ACTIVITIES:
Decrease in notes payable to
Nordstrom, Inc. (49,000) (125,900)
Increase in commercial paper 45,922 71,194
Proceeds from issuance of long-term
debt, net - 41,788
Repayments of long-term debt (43,100) (10,000)
-------- -------
Net cash used in financing activities (46,178) (22,918)
-------- -------
Net increase (decrease) in cash and
cash equivalents 111 (306)
Cash and cash equivalents
at beginning of period 91 440
-------- -------
Cash and cash equivalents at end of period $ 202 $ 134
======== =======
<FN>
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, 1996.
</TABLE>
page 5 of 7
<PAGE>
NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
Note 1:
The balance sheets of Nordstrom Credit, Inc. as of April 30, 1996 and
1995, 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, 1997.
It is not considered necessary to include detailed footnote information
as of April 30, 1996 and 1995. 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, 1996.
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
April 30, 1996 and 1995, 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.
Certain reclassifications of prior year balances have been made for
consistent presentation.
Note 2:
During the first quarter of 1996, the Company elected to prepay $43,100
of its 9.375% sinking fund debentures in order to take advantage of lower
short-term interest rates. This resulted in an extraordinary charge of
$1,452, net of applicable income taxes of $900. The premium paid has not
been included as a fixed charge for the calculation of the ratio of
earnings available for fixed charges to fixed charges.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Service charge income for the quarter increased when compared to the same
period in 1995 due to a higher volume of both Nordstrom and VISA
receivables outstanding during the quarter.
page 6 of 7
<PAGE>
Interest expense for the quarter increased when compared to the same
period in the prior year due to higher levels of debt outstanding during
the quarter.
Bad debt expense for the quarter increased when compared to the same
period in 1995 as a result of growth in the Bank's VISA credit card
program and an increase in the level of bad debt write-offs.
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: June 10, 1996
___________________
page 7 of 7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ----------------------------------- ------------------------------
<S> <C> <C>
27.1 Financial Data Schedule Filed herewith electronically.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> APR-30-1996
<CASH> 202
<SECURITIES> 0
<RECEIVABLES> 871006
<ALLOWANCES> 26074
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5316
<DEPRECIATION> 0
<TOTAL-ASSETS> 856838
<CURRENT-LIABILITIES> 0
<BONDS> 326000
<COMMON> 0
0
0
<OTHER-SE> 200712
<TOTAL-LIABILITY-AND-EQUITY> 856838
<SALES> 0
<TOTAL-REVENUES> 35977
<CGS> 0
<TOTAL-COSTS> 20972
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10812
<INCOME-PRETAX> 15005
<INCOME-TAX> 5500
<INCOME-CONTINUING> 9505
<DISCONTINUED> 0
<EXTRAORDINARY> 1452
<CHANGES> 0
<NET-INCOME> 8053
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
