<PAGE>
UNITED STATES
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, 1998
[ ] 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, 1998 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.
----------------------
INDEX
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<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Statements of Earnings
Three months ended April 30, 1998
and 1997 3
Balance Sheets
April 30, 1998 and 1997
and January 31, 1998 4
Statements of Cash Flows
Three months ended April 30, 1998
and 1997 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
</TABLE>
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,
------------------
<S> <C> <C>
1998 1997
-------- --------
Service charge income $27,567 $27,821
Rental income from Nordstrom
National Credit Bank 321 321
-------- --------
Total revenue 27,888 28,142
Expenses:
Interest, net 8,113 8,753
Service fees paid to
Nordstrom National
Credit Bank 5,736 5,947
Other general and
administrative 358 335
-------- --------
Total expenses 14,207 15,035
-------- --------
Earnings before income
taxes 13,681 13,107
Income taxes 4,972 4,800
-------- --------
Net earnings $ 8,709 $ 8,307
======== ========
Ratio of earnings
available for fixed
charges to fixed charges 2.68 2.50
======== ========
<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, 1998.
</TABLE>
page 3 of 8
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NORDSTROM CREDIT, INC.
BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
April 30, January 31, April 30,
1998 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 367 $ 157 $ 12,976
Customer accounts receivable
net of holdback allowance
of $27,522, $30,384 and
$24,369 574,741 636,420 633,255
Other accounts receivable 1,548 6,138 459
Property and equipment, net 4,724 4 786 4,991
Other assets 1,506 1,630 1,901
---------- ---------- ----------
$582,886 $649,131 $653,582
========== ========== ==========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- ---------------------------------------------
Note payable to bank $ 50,000 $ 50,000 $ 50,000
Commercial paper 37,273 108,020 59,040
Accrued interest, taxes
and other 8,712 12,919 10,102
Long-term debt 353,350 353,350 403,350
---------- ---------- ----------
Total liabilities 449,335 524,289 522,492
Investment of
Nordstrom, Inc. 133,551 124,842 131,090
---------- ---------- ----------
$582,886 $649,131 $653,582
========== ========== ==========
<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, 1998.
</TABLE>
page 4 of 8
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NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended April 30,
------------------
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 8,709 $ 8,307
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 190 199
Change in:
Other accounts receivable 4,590 13,415
Accrued interest, taxes and other (4,207) 1,549
-------- --------
Net cash provided by operating activities 9,282 23,470
-------- --------
INVESTING ACTIVITIES:
Decrease in investment in
customer accounts receivable, net 61,679 56,295
Additions to property and equipment, net (4) -
-------- --------
Net cash provided by investing activities 61,675 56,295
-------- --------
FINANCING ACTIVITIES:
Decrease in commercial paper (70,747) (54,730)
Decrease in notes payable to
Nordstrom, Inc. - (54,000)
Proceeds from issuance of long-term
debt, net - 91,836
Cash dividend paid to Nordstrom, Inc. - (50,000)
-------- --------
Net cash used in financing activities (70,747) (66,894)
-------- --------
Net increase in cash and cash equivalents 210 12,871
Cash and cash equivalents
at beginning of period 157 105
-------- --------
Cash and cash equivalents at end of period $ 367 $ 12,976
======== ========
<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, 1998.
</TABLE>
page 5 of 8
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NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Note 1 - Basis of Presentation
The balance sheets of Nordstrom Credit, Inc. (the "Company") as of
April 30, 1998 and 1997, 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, 1999.
It is not considered necessary to include detailed footnote information
as of April 30, 1998 and 1997. 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, 1998.
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, 1998 and 1997, 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 - New Accounting Rules
In March 1998 the Accounting Standards Executive Committee of the AICPA
issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use," which requires
that certain software costs be capitalized and amortized over the period of
use. The effect of adopting SOP 98-1 during the quarter ended April 30,
1998, was not material to net earnings.
As of February 1, 1998, the Company has adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
establishes standards for the reporting and display of comprehensive income
and its components. Adoption of this standard did not impact the Company's
financial position, results of operations or cash flows.
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 1997, primarily due to a reduction in the accounts receivable
balances on which the Company earns service fees, which was partially offset
by an increase in finance charge rates effective in July 1997.
Interest expense decreased for the quarter when compared to the same period
in 1997, primarily due to lower levels of short-term debt outstanding.
During the first quarter of 1997, 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
Vice President and Treasurer
(Principal Financial and Accounting Officer)
Date: June 9, 1998
___________________
page 8 of 8
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EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- --------------------------------- ------------------------------
27.1 Financial Data Schedule Filed herewith electronically.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> APR-30-1998
<CASH> 367
<SECURITIES> 0
<RECEIVABLES> 602,263
<ALLOWANCES> 27,522
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,724
<DEPRECIATION> 0
<TOTAL-ASSETS> 582,886
<CURRENT-LIABILITIES> 0
<BONDS> 353,350
0
0
<COMMON> 0
<OTHER-SE> 133,551
<TOTAL-LIABILITY-AND-EQUITY> 582,886
<SALES> 0
<TOTAL-REVENUES> 27,888
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,094
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,113
<INCOME-PRETAX> 13,681
<INCOME-TAX> 4,972
<INCOME-CONTINUING> 8,709
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,709
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
