<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, 1997
/ / 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 June 4, 1997 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 8
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NORDSTROM CREDIT, INC.
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INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Statements of Earnings
Three months ended April 30, 1997
and 1996 3
Balance Sheets
April 30, 1997 and 1996
and January 31, 1997 4
Statements of Cash Flows
Three months ended April 30, 1997
and 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
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page 2 of 8
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NORDSTROM CREDIT, INC.
STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended April 30,
-------------------
1997 1996
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<S> <C> <C>
Service charge income $27,821 $35,716
Rental income from Nordstrom
National Credit Bank 321 261
------- -------
Total Revenue 28,142 35,977
Expenses:
Interest, net 8,753 10,812
Service fees paid to Nordstrom
National Credit Bank 5,947 6,517
Bad debts - 3,271
Other general and administrative 335 372
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Total expenses 15,035 20,972
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Earnings before income taxes
and extraordinary item 13,107 15,005
Income taxes 4,800 5,500
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Earnings before extraordinary item 8,307 9,505
Extraordinary charge related to the
early extinguishment of debt, net
of income taxes of $900 - 1,452
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Net earnings $ 8,307 $ 8,053
======= =======
Ratio of earnings
available for fixed
charges to fixed charges 2.50 2.13
======= =======
<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, 1997.
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page 3 of 8
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NORDSTROM CREDIT, INC.
BALANCE SHEETS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
April 30, January 31, April 30,
1997 1997 1996
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<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 12,976 $ 105 $ 202
Customer accounts receivable
net of holdback allowance
of $24,369, $26,793 and
$26,074 633,255 689,550 844,932
Other accounts receivable 459 13,874 2,469
Property and equipment, net 4,991 5,071 5,316
Other assets 1,901 1,506 3,919
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$653,582 $710,106 $856,838
======== ========== =========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- --------------------------------------------
<S> <C> <C> <C>
Notes payable to
Nordstrom, Inc. $ - $ 54,000 $ 37,000
Note payable to bank 50,000 50,000 50,000
Commercial paper 59,040 113,770 228,423
Accrued interest, taxes
and other 10,102 8,553 14,703
Dividend payable to
Nordstrom, Inc. - 50,000 -
Long-term debt 403,350 311,000 326,000
-------- ---------- ---------
Total liabilities 522,492 587,323 656,126
Investment of
Nordstrom, Inc. 131,090 122,783 200,712
-------- ---------- ---------
$653,582 $710,106 $856,838
======== ========== =========
<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, 1997.
</TABLE>
page 4 of 8
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NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended April 30,
-----------------
1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES:
Earnings before extraordinary item $ 8,307 $ 9,505
Adjustments to reconcile earnings
to net cash provided by
operating activities:
Extraordinary charge related to early
extinguishment of debt, net of
income taxes of $900 - (1,452)
Depreciation and amortization 199 586
Change in:
Other accounts receivable 13,415 4,748
Other assets - (2,303)
Accrued interest, taxes and other 1,549 5,279
-------- -------
Net cash provided by operating activities 23,470 16,363
-------- -------
INVESTING ACTIVITIES:
Decrease in investment in
customer accounts receivable, net 56,295 29,926
-------- -------
Net cash provided by investing activities 56,295 29,926
-------- ------
FINANCING ACTIVITIES:
Decrease in notes payable to
Nordstrom, Inc. (54,000) (49,000)
(Decrease)/increase in commercial paper (54,730) 45,922
Proceeds from issuance of long-term
debt, net 91,836 -
Repayments of long-term debt - (43,100)
Cash dividend paid to Nordstrom, Inc. (50,000) -
-------- -------
Net cash used in financing activities (66,894) (46,178)
-------- -------
Net increase in cash and cash
equivalents 12,871 111
Cash and cash equivalents
at beginning of period 105 91
-------- -------
Cash and cash equivalents at end of period $ 12,976 $ 202
======== =======
<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, 1997.
</TABLE>
page 5 of
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NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
Note 1:
The balance sheets of Nordstrom Credit, Inc. (the "Company") as of April 30,
1997 and 1996, 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, 1998.
It is not considered necessary to include detailed footnote information as of
April 30, 1997 and 1996. 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, 1997.
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, 1997 and 1996, 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.
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.
page 6 of 8
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Service charge income decreased for the quarter when compared to the same
period in 1996 primarily due to a reduction in service charge income from the
Company's VISA card program as a result of the securitization of these
receivables in August 1996.
Interest expense for the quarter decreased when compared to the same period in
the prior year due primarily to lower levels of debt outstanding during the
quarter.
Bad debt expense and VISA service fees paid to Nordstrom National Credit Bank
decreased for the quarter when compared to the same period in 1996 due to the
securitization of the VISA receivables.
During the quarter, the Company filed a shelf registration statement on Form
S-3 to register up to $250 million in debt securities, and issued $92.4
million in medium-term notes under the registration.
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.
page 7 of 8
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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 6, 1997
___________________
page 8 of 8
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<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ----------------------------------- -----------------------------
<S> <C> <C>
27.1 Financial Data Schedule Filed herewith electronically.
</TABLE>
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