10-K 1 v71301e10-k.txt FORM 10-K PERIOD ENDED JANUARY 31, 2001 1 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 EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2001 [ ] 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.)
1617 Sixth Avenue, Seattle, Washington 98101 -------------------------------------------------------------- (Address of principal executive offices) (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. [ ] 1 of 22 2 On March 19, 2001, 133,801,918 shares of common stock were outstanding, and the aggregate market value of those shares (based upon the closing price as reported by NYSE) held by non-affiliates was approximately $1.5 billion. Documents Incorporated by Reference: Portions of Nordstrom, Inc. 2000 Annual Report to Shareholders (Parts I, II and IV) Portions of Proxy Statement for 2001 Annual Meeting of Shareholders (Part III) 2 of 22 3 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, 2001, the Company operated 77 large specialty stores in Alaska, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Michigan, Minnesota, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Virginia and Washington, selling a wide selection of apparel, shoes and accessories for women, men and children. The Company also operated 37 stores under the name "Nordstrom Rack" and one clearance store. The Nordstrom Rack stores purchase merchandise directly from manufacturers, as well as serving, in part, as outlets for clearance merchandise from the Company's large specialty stores. The Nordstrom Rack stores are located in Arizona, California, Colorado, Georgia, Hawaii, Illinois, Maryland, Michigan, Minnesota, New York, Oregon, Pennsylvania, Texas, Utah, Virginia and Washington. The Company also operated 2 free-standing shoe stores located in Hawaii and 3 Specialty Boutiques in New York and California under the name "Faconnable". As a result of the acquisition of Faconnable, S.A. of Nice, France in October 2000, the Company also operates 20 Faconnable boutiques located primarily in Europe. Faconnable is a wholesaler and retailer of high quality men's and women's apparel and accessories. On November 1, 1999, the Company established a subsidiary to operate its Internet commerce and catalog businesses, Nordstrom.com, LLC. The Company contributed certain assets and liabilities associated with its Internet commerce and catalog businesses, and $10 million in cash. Venture funds associated with Benchmark Capital and Madrona Investment Group, collectively, contributed $16 million in cash to the new entity. At January 31, 2001, the Company owns approximately 81.4% of Nordstrom.com, LLC, with Benchmark Capital and Madrona Investment Group collectively holding the remaining interest through their ownership interests in Nordstrom.com, LLC's managing member, Nordstrom.com, Inc. The holders of the minority interest of Nordstrom.com LLC, have the right to sell their shares of Nordstrom.com LLC, to the Company for $80 million in the event that certain events do not occur. This right will terminate without any further action by either party if the Company provides at least $100 million in additional funding to Nordstrom.com, Inc. prior to July 1, 2002 or if Nordstrom.com, Inc. completes an initial public offering of its common stock prior to September 1, 2002. In March 2001, the Company opened a large specialty store in Hurst, Texas and a new Nordstrom Rack store in Los Angeles, California. A new Nordstrom Rack store is scheduled to open in Broomfield, Colorado in April 2001. In addition, the Company plans to open Full-Line stores in Columbus, Ohio; Tampa, Florida and Chandler, Arizona, as well as Nordstrom Rack stores in Roseville, San Francisco and Oxnard, California; Grand Rapids, Michigan; Dulles, Virginia and Henderson, Nevada during fiscal 2001. 3 of 22 4 Item 1. Business (continued) ----------------------------- The west coast and the east coast of the United States are the markets in which the Company has the largest presence. An economic downturn or other significant event within one of these markets may have a material effect on the Company's operating results. The Company purchases merchandise from many suppliers, no one of which accounted for more than 2% of 2000 net purchases. The Company believes that it is not dependent on any one supplier, and considers its relations with its suppliers to be satisfactory. The Company has approximately 70 trademarks. The loss or abandonment of the Federally registered names "Nordstrom" or "Faconnable" would materially impact the business of the Company. The loss or abandonment of the Federally registered trademarks "Brass Plum", "Caslon", "Classiques Entier", "Halogen" and "Talora" may impact the business of the Company, but not in a material manner. With the exception of the above mentioned Federally registered trademarks, the loss or abandonment of any particular trademark would have little, if any, impact on the business of the Company. Due to the Company's anniversary sale in July and holidays in December, sales are higher in the second and fourth quarters of the fiscal year than in the first and third quarters. During the fiscal year ended January 31, 2001, the Company regularly employed on a full or part-time basis an average of approximately 43,000 employees. Due to the seasonal nature of the Company's business, employment increased to approximately 49,000 employees in July, 2000 and December, 2000. 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, boutiques, and mail order and internet businesses. 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 2000 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Management's Discussion and Analysis Note 1 in Notes to Consolidated Financial Statements Note 15 in Notes to Consolidated Financial Statements Retail Store Facilities Executive Officers of the Registrant ------------------------------------
Officer Name Age Title Since Family Relationship -------------------- --- -------------- ------- ------------------- Jammie Baugh 48 Executive Vice 1990 None President Mark S. Brashear 39 Executive Vice 2001 None President
4 of 22 5 Executive Officers of the Registrant (continued) ------------------------------------------------ Robert E. Campbell 45 Vice President and 1999 None Treasurer Gail A. Cottle 49 Executive Vice 1985 None President Dale Cameron (Crichton) 52 Executive Vice 1985 None President Linda Toschi Finn 53 Executive Vice 1998 None President Kevin T. Knight 45 Executive Vice 1998 None President, Chairman And Chief Executive Officer of Nordstrom fsb, And President of Nordstrom Credit, Inc. Michael G. Koppel 44 Vice President 1999 None Corporate Controller And Acting Chief Financial Officer Llynn (Len) A. Kuntz 40 Executive Vice 1998 None President Robert J. Middlemas 44 Executive Vice 1993 None President Blake W. Nordstrom 40 President 1991 Brother of Erik B. and Peter E. Nordstrom; son of Bruce A. Nordstrom, a Director of the Company; and nephew of D. Wayne Gittinger, a Director of the Company. Bruce A. Nordstrom 67 Chairman of the 1966 Father of Blake W., Erik B. and Board of Directors Peter E. Nordstrom; cousin of John N. Nordstrom, a Director of the Company and Brother-in-law of D. Wayne Gittinger, a Director of the Company. Erik B. Nordstrom 37 Executive Vice 1995 Brother of Blake W. and Peter E. President Nordstrom; son of Bruce A. Nordstrom, a Director of the Company; and nephew of D. Wayne Gittinger, a Director of the Company. Peter E. Nordstrom 39 Executive Vice 1995 Brother of Blake W. and Erik B. President Nordstrom; son of Bruce A. Nordstrom, a Director of the Company; and nephew of D. Wayne Gittinger, a Director of the Company.
5 of 22 6 Executive Officers of the Registrant (continued) ------------------------------------------------ James R. O'Neal 42 Executive Vice 1997 None President R. Michael Richardson 44 Vice President 2001 None and Chief Information Officer K.C. (Karen) Shaffer 47 Executive Vice 2001 None President Joel T. Stinson 51 Executive Vice 1996 None President and Chief Administrative Officer Delena M. Sunday 40 Executive Vice 1998 None President Susan A. Wilson 55 Executive Vice 1997 None Tabor President Michael A. Tam 44 Executive Vice 2001 None President Geevy S.K. Thomas 36 Executive Vice 1998 None President
Jammie Baugh was named Executive Vice President of Human Resources in February 2000. Prior thereto, she served as Executive Vice President and Northwest General Manager since May 1997, Executive Vice President and General Manager Southern California since 1991, and Vice President and General Manager Southern California since 1990. Mark S. Brashear was named Executive Vice President and Southwest General Manager of the Full-Line Store Group in February 2001. In April 1999, he was promoted to Division Vice President and Strategic Planning Manager of the Southwest Business Unit. Mr. Brashear has been responsible for strategic planning since February 1998, when he was named Strategic Planning Manager for California and the Southwest. Prior thereto, Mr. Brashear held various store management positions with the Company. Robert E. Campbell was named Vice President of Strategy and Planning and Treasurer in May 1999. Prior thereto, he was involved with corporate strategy and planning and was responsible for the Company's investor relations function since March 1998, and served as Manager of Financial Analysis since February 1997. Prior to joining Nordstrom Inc., Mr. Campbell served in a number of financial positions with restaurant and retail companies based on the West Coast. 6 of 22 7 Executive Officers of the Registrant (continued) ------------------------------------------------ Gail A. Cottle, Executive Vice President, was named President of Nordstrom Product Group in February 2000. Prior thereto, she served as Executive Vice President - Nordstrom Product Group General Manager since 1996. From 1992 to 1996, she was Executive Vice President of women's apparel, children's apparel, and accessories product development. The Faconnable business unit was added to the Nordstrom Product Group in 1999 and worldwide operations began reporting to the Nordstrom Product Group, upon the acquisition of Faconnable, in October 2000. Dale Cameron (Crichton) was named Executive Vice President and Corporate Merchandise Manager, Cosmetics, in February 1998. Prior thereto, she served as Vice President, and Corporate Merchandise Manager, Cosmetics and Gifts since March 1985. Linda T. Finn was named Executive Vice President of Marketing in September 2000. She was promoted to Vice President and Marketing Director for the Full-Line Store Group in October 1999. Ms. Finn has been responsible for the development of the Company's marketing strategies since May 1998 when she was named Vice President of Sales Promotion. Prior thereto, she held various management positions with the Company in the areas of corporate advertising and sales promotions. Kevin T. Knight has been an Executive Vice President of Nordstrom, Inc. since September 2000, and also serves as Chairman and Chief Executive Officer of Nordstrom fsb, President of Nordstrom Credit, Inc., and, as of February 2000, was named President of Nordstrom Credit Group. Prior thereto, he served as President of Nordstrom fsb (formerly Nordstrom National Credit Bank), President of Nordstrom Credit, Inc., and General Manager of the credit business unit since April 1998. Prior to joining Nordstrom, he was Senior Vice President of Retailer Financial Services, a unit of General Electric Capital Corporation, since 1995. Prior thereto, he held various positions with General Electric since 1977. Michael G. Koppel was hired as Vice President, Corporate Controller and Principal Accounting Officer in August 1999. Prior to joining Nordstrom, he served as Chief Operating Officer of CML Group, a specialty retail holding company. From 1997 through 1998, he was Chief Financial Officer of Lids Corporation, a mall based specialty retailer. From 1984 through 1997, he held a number of financial positions with the May Department Stores, most recently as Vice President-Controller of its Filenes division. Llynn (Len) A. Kuntz was named Executive Vice President and Northwest General Manager of the Full-Line Store Group in February 2001. Prior thereto, he served as Vice President and Director of the Full-Line Store Strategy Group since May 1999, as Vice President, and East Coast Regional Manager since February 1998, and as General Manager of the Northeast Region since 1995. Robert J. Middlemas has been Executive Vice President and Central States General Manager since November 1997. Prior thereto, he served as Vice President and Central States General Manager since 1993. 7 of 22 8 Executive Officers of the Registrant (continued) ------------------------------------------------ Blake W. Nordstrom was named President of the Company in August 2000. From February 2000 until his appointment as President, he served as Executive Vice President and President of Nordstrom Rack Group. Prior thereto, he served as Co-President responsible for credit, community relations, operations, shoes and Nordstrom Rack business units since June 1995 and as Vice President and General Manager Washington/Alaska since 1991. Bruce A. Nordstrom was named Chairman of the Board of Directors in August 2000. He has served as a Director of the Company since 1966, and served as Co-Chairman of the Board of Directors from 1971 until 1995. Mr. Nordstrom is the grandson of the Company founder and, with his cousins John N. Nordstrom and James F. Nordstrom and his former brother-in-law John A. McMillan, he assumed leadership of the company from the second generation in 1968. Erik B. Nordstrom was named Executive Vice President of Full-Line Stores in August 2000. Prior thereto, he served as Executive Vice President and Northwest General Manager since February 2000, as Co-President responsible for Nordstrom Product Group since June 1995 and as Store/Regional Manager - Minnesota since 1992. Peter E. Nordstrom was named Executive Vice President and President of Full-Line Stores in September 2000. Prior thereto, he served as Executive Vice President and Director of Full-Line Store Merchandise Strategy for children's apparel, cosmetics, junior apparel, lingerie, hosiery, men's apparel and women's activewear since February 2000, as Co-President responsible for sales promotion, human resources, and diversity affairs since June 1995, and as Regional Manager of the Orange County area since 1991. James R. O'Neal was named Executive Vice President and General Manager of the East Coast in August 2000. Prior thereto, he served as Executive Vice President and Southwest General Manager since November 1997, as Vice President -- Northern California since February 1997, as General Manager Northern California from 1995 to 1997, and as City Regional Manager from 1993 to 1995. R. Michael Richardson was named Vice President and Chief Information Officer in February 2001, and is responsible for leading the Company's corporate information technology (IT) initiatives. Prior thereto, he served as Division Vice President of Enterprise Development and Architecture since October 1998, and as IT Development Manager of the Nordstrom Product Group since October 1997. Mr. Richardson has also served as IT Development Manager for various corporate departments since 1992. K.C. (Karen) Shaffer was named Executive Vice President and General Merchandise Manager of the Nordstrom Rack Group in February 2001. She has also served as Division Vice President and Northwest Regional Manager of the Nordstrom Rack Division since April 1999 and as Regional Manager, Northwest, Nordstrom Rack Division since June 1998. Prior thereto, Ms. Shaffer held various management Positions with the Company at the department, store and regional levels. Joel T. Stinson was named Executive Vice President and Chief Administrative Officer in September 2000, and is responsible for overseeing the areas of information technology, operations and logistics, legal, store planning and real estate. Prior thereto, he served as Vice President of Operations since May 1995 and as Corporate Operations Manager since 1993. 8 of 22 9 Executive Officers of the Registrant (continued) ------------------------------------------------ Delena M. Sunday was named Executive Vice President of Diversity Affairs in September 2000. Ms. Sunday has been responsible for the Company's diversity initiatives since 1996 when she was named Director of Diversity Affairs and then promoted to Vice President of Diversity Affairs in February 1998. Prior thereto, Ms. Sunday held various management positions with the Company at the department, store and regional levels. Susan A. Wilson Tabor was named Executive Vice President and President of the Nordstrom Rack Division in September 2000. Prior thereto, she served as Executive Vice President and Nordstrom Rack General Manager since February 1998, as Vice President and Nordstrom Rack General Manager from February 1997 to February 1998, and served as Nordstrom Rack General Manager from 1993 to February 1997. Michael A. Tam was named Executive Vice President in February 2001. Mr. Tam joined the Company in April 1999 as Division Vice President and Director of Brands for the Nordstrom Product Group. Prior to joining the Company, he was Vice President of Retail Marketing for Starbucks Corp. from October 1996 to March 1999, and Senior Vice President, Chief Marketing Officer for McDonald's Corp. Japan from December 1994 to October 1996. Geevy S.K. Thomas was named Executive Vice President and General Merchandise Manager of Full-Line Stores in February 2001, and is responsible for merchandise strategy for women's apparel, shoes, and accessories. He also served as Executive Vice President of Full-Line Stores and Director of Merchandising Strategy since February 2000, as Vice President and Director of Merchandising Strategy since May 1999, Vice President and Regional Manager of Orange County and Los Angeles since February 1998, and as General Manager of Los Angeles since February 1997. Prior thereto, Mr. Thomas has also held various general, regional and store management positions with the Company. The officers are appointed annually by the Board of Directors following each year's Annual Meeting of Shareholders. Officers serve at the discretion of the Board of Directors. Item 2. Properties. -------------------- The following table summarizes the number of stores owned or operated by the Company and the percentage of total store area represented by each listed category at January 31, 2001:
Number of % of total store stores square footage --------- ---------------- Owned stores 24 23% Leased stores 82 34 Owned on leased land 32 41 Partly owned & partly leased 2 2 ---- ----- 140 100% ==== =====
9 of 22 10 Item 2. Properties (continued) ------------------------------- The Company also operates nine merchandise distribution centers, six of which are owned, two of which are leased, and one of which is owned on leased land. The Company owns its principal offices in Seattle, Washington, and an office building in the Denver, Colorado metropolitan area that serves as the principal offices of Nordstrom fsb and Nordstrom Credit, Inc. Certain other information required under this item is included in the following sections of the Company's 2000 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Note 9 in Notes to Consolidated Financial Statements Note 12 in Notes to Consolidated Financial Statements Retail Store Facilities Item 3. Legal Proceedings. --------------------------- The information required under this item is included in the following section of the Company's 2000 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report: Note 16 in Notes to Consolidated Financial Statements Item 4. Submission of Matters to a Vote of Security Holders. ------------------------------------------------------------- None PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. ---------------------------------------------------------------------- The Company's Common Stock, without par value, is traded on the New York Stock Exchange under the symbol "JWN." The approximate number of holders of Common Stock as of March 19, 2001 were 60,000. Certain other information required under this item with respect to stock prices and dividends is included in the following sections of the Company's 2000 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Financial Highlights Consolidated Statements of Shareholders' Equity Note 17 in Notes to Consolidated Financial Statements 10 of 22 11 Item 6. Selected Financial Data. --------------------------------- The information required under this item is included in the following Sections of the Company's 2000 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Note 1 in Notes to Consolidated Financial Statements 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 2000 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report: Management's Discussion and Analysis Item 7A. Quantitative and Qualitative Disclosures About Market Risk. --------------------------------------------------------------------- The Company is subject to the risk of fluctuating interest rates in the normal course of business, primarily as a result of its short-term borrowing and investment activities which generally bear interest at variable rates. Because the short-term borrowings and investments have maturities of three months or less, the Company believes that the risk of material loss is low, and that the carrying amount approximates fair value. The majority of the Company's revenue, expense and capital expenditures are transacted in United States dollars. However, the Company periodically enters into foreign currency purchase orders for apparel and shoes denoted in Italian Lira. The Company uses forward contracts to hedge against fluctuations in foreign currency prices. The amounts of these contracts are immaterial. The use of derivatives is limited to only those financial instruments that have been authorized by the Company's Acting Chief Financial Officer and approved by the Finance Committee. In addition, the functional currency of Faconnable, S.A. of Nice, France is the French Franc. Assets and liabilities of Faconnable are translated into U.S. dollars at the exchange rate prevailing at the end of the period. Income and expenses are translated into U.S. dollars at the exchange rate prevailing on the respective dates of the transactions. The effects of changes in foreign currency exchange rates are included in other comprehensive earnings. 11 of 22 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk (continued) -------------------------------------------------------------------------------- The table below presents principal amounts, at book value, by year of maturity, and related weighted average interest rates. The fair value of long-term debt (including current maturities), is calculated using quoted market prices of the same or similar issues with the same remaining term to maturity.
Total at Fair Value January 31, January 31, In thousands 2001 2002 2003 2004 2005 Thereafter 2001 2001 2000 --------------------------------------------------------------------------------------------------------------------------------- INTEREST RATE RISK LIABILITIES Long-term debt - Fixed $12,586 $131,150 $1,157 $1,224 $400,208 $565,971 $1,112,296 $1,031,282 $715,498 Average interest rate 8.5% 6.9% 7.0% 7.1% 8.4% 6.4% 7.2%
Certain other information required under this item is included in the following sections of the Company's 2000 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Note 1 in Notes to Consolidated Financial Statements Note 7 in Notes to Consolidated Financial Statements Note 17 in Notes to Consolidated Financial Statements Item 8. Financial Statements and Supplementary Data. ----------------------------------------------------- The information required under this item is included in the following sections of the Company's 2000 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 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. ------------------------------------------------------------------------ None 12 of 22 13 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 2001 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 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 2001 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, 2001 Compensation and Stock Option Committee Report on the 2000 Fiscal Year 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 2001 Annual Meeting of Shareholders, which section is incorporated by reference herein and will be filed within 120 days after the end of the Company's fiscal year: Security Ownership of Certain Beneficial Owners and Management 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 2001 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 Compensation Committee Interlocks and Insider Participation Certain Relationships and Related Transactions 13 of 22 14 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 21 Schedule II - Valuation and Qualifying Accounts 22
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 2000 Annual Report to Shareholders as incorporated by reference herein from Exhibit 13.1 of this report. (a)3. Exhibits -------- (3.1) Articles of Incorporation of the Registrant, as amended and restated, are hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended April 30, 1999, Exhibit 3.1. (3.2) By-laws of the Registrant, as amended and restated on August 31, 2000, are filed herein as an exhibit. (4.1) Indenture between Registrant and Norwest Bank Colorado, N.A., as trustee, dated March 11, 1998 is hereby incorporated by reference from Registration No. 333-47035, Exhibit 4.1. (4.2) Senior indenture between Registrant and Norwest Bank Colorado, N.A., as trustee, dated January 13, 1999 is hereby incorporated by reference from Registration No. 333-69281, Exhibit 4.3. (4.3) Form of Subordinated Indenture between Registrant and Norwest Bank Colorado, N.A., as trustee, dated January 13, 1999 is hereby incorporated by reference from Registration No. 333-69281, Exhibit 4.4. 14 of 22 15 (a)3. Exhibits (continued) -------------------- (10.1) 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. (10.2) The Nordstrom Supplemental Retirement Plan is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1993, Exhibit 10.3. (10.3) 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. (10.4) 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. (10.5) Master Pooling and Servicing Agreement dated August 14, 1996 between Nordstrom National Credit Bank and Norwest Bank Colorado, N.A., as trustee, is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.1. (10.6) Series 1996-A Supplement to Master Pooling and Servicing Agreement dated August 14, 1996 between Nordstrom National Credit Bank, Nordstrom Credit, Inc. and Norwest Bank Colorado, N.A., as trustee, is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.2. (10.7) First amendment to the Series 1996-A Supplement to Master Pooling and Servicing Agreement dated August 14, 1996 between Nordstrom National Credit Bank, Nordstrom Credit, Inc. and Norwest Bank Colorado, N.A., as trustee, dated December 10, 1997 is hereby incorporated by reference from the Nordstrom Credit, Inc. Form 10-K for the year ended January 31, 1998, Exhibit 10.13. (10.8) Second Amendment to the Series 1996-A Supplement to Master Pooling and Servicing Agreement dated August 14, 1996, between Nordstrom Credit, Inc., Nordstrom National Credit Bank and Norwest Bank Colorado, N.A., as trustee, dated February 25, 1999, is hereby incorporated by reference from the Nordstrom Credit, Inc. Form 10-Q for the quarter ended April 30, 1999, Exhibit 10.1. (10.9) Transfer and Administration Agreement dated August 14, 1996 between Nordstrom National Credit Bank, Enterprise Funding Corporation and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.3. 15 of 22 16 (a)3. Exhibits (continued) -------------------- (10.10) First Amendment to the Transfer and Administration Agreement dated August 19, 1997 between Enterprise Funding Corporation, Nordstrom National Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended April 30, 1999, Exhibit 10.1. (10.11) Second Amendment to the Transfer and Administration Agreement dated July 23, 1998 between Enterprise Funding Corporation, Nordstrom National Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended April 30, 1999, Exhibit 10.2. (10.12) Receivables Purchase Agreement dated August 14, 1996 between Registrant and Nordstrom Credit, Inc. is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1997, Exhibit 10.12. (10.13) The Nordstrom, Inc. 1997 Stock Option Plan is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended April 30, 1999, Exhibit 10.4. (10.14) The Nordstrom, Inc. Profit Sharing and Employee Deferral Retirement Plan is hereby incorporated by reference from the Registrant's Report on Form S-8, Registration No. 333-79791 filed on June 2, 1999. (10.15) Amended and Restated Revolving Credit Facility between Registrant and a group of commercial banks, dated October 15, 1999 is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended October 31, 1999, Exhibit 10.1. (10.16) Commercial Paper Dealer Agreement dated October 2, 1997 between Registrant and Bancamerica Securities, Inc. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1997, Exhibit 10.1. (10.17) Commercial Paper Agreement dated October 2, 1997 between Registrant and Credit Suisse First Boston Corporation is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1997, Exhibit 10.2. (10.18) Issuing and Paying Agency Agreement dated October 2, 1997 between Registrant and First Trust of New York, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1997, Exhibit 10.3. (10.19) Joint Venture Agreement between Nordstrom, Inc. and Nordstorm.com, Inc. dated as of August 24, 1999 is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 2000, Exhibit 10.21. 16 of 22 17 (a)3. Exhibits (continued) -------------------- (10.20) Credit Agreement dated as of February 29, 2000, between 1700 Seventh L.P., several lenders from time to time party thereto, with Bank of America, N.A. as Administrative Agent and as Project Administrative Agent, is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 2000, Exhibit 10.22. (10.21) Guaranty Agreement dated as of February 29, 2000, between Registrant, Bank of America, N.A., and the Lenders party to the Credit Agreement(described in 10.22 above), is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 2000, Exhibit 10.23. (10.22) Third Amendment to the Transfer and Administration Agreement dated August 11, 1999 between Enterprise Funding Corporation, Nordstrom National Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, Exhibit 10.1. (10.23) Fourth Amendment to the Transfer and Administration Agreement dated March 1, 2000 between Enterprise Funding Corporation, Nordstrom fsb, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, Exhibit 10.2. (10.24) Fifth Amendment to the Transfer and Administration Agreement dated July 20, 2000 between Enterprise Funding Corporation, Nordstrom fsb, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, Exhibit 10.3. (10.25) First Amendment to the Master Pooling and Servicing Agreement dated March 1, 2000, between Nordstrom fsb and Wells Fargo Bank West, N.A., as trustee, is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, Exhibit 10.4. (10.26) Share Purchase and Contribution Agreement dated as of September 27, 2000 by and among Nordstrom, Inc., Nordstrom European Capital Group, and the Selling Shareholders of Faconnable, S.A., is hereby incorporated by reference to Exhibit 2.1 to the Registrant's Registration Statement on Form S-3, Registration No. 333-50028 filed on November 15, 2000. (10.27) Amendment to the Share Purchase and Contribution Agreement dated as of October 20, 2000 by and among Nordstrom, Inc., Nordstrom European Capital Group, and the Selling Shareholders of Faconnable, S.A., is hereby incorporated by reference to Exhibit 2.2 to the Registrant's Registration Statement on Form S-3, Registration No. 333-50028 filed on November 15, 2000. (10.28) The Put Agreement dated November 1, 1999 between Nordstrom, Inc. and the holders of the Series C Preferred Stock of Nordstrom.com, Inc. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 2000, Exhibit 10.3. (13.1) The Company's 2000 Annual Report to Shareholders is filed herein as an Exhibit. 17 of 22 18 (a)3. Exhibits (continued) -------------------- (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 21 of this report. All other exhibits are omitted because they are not applicable, not required, or because the required information is included in the Company's 2000 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. The Company filed a Form 8-K on September 7, 2000 to announce senior management changes. The Company also filed a Form 8-K on October 11, 2000 to announce non-recurring charges and third quarter earnings expectations. 18 of 22 19 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/ Michael G. Koppel ---------------------------------------------------- Michael G. Koppel Vice President and Corporate Controller Date: April 11, 2001 -------------- 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 Financial and Principal Executive Officer: Accounting Officer: /s/ Michael G. Koppel /s/ Bruce A. Nordstrom ------------------------------- --------------------------------- Michael G. Koppel Bruce A. Nordstrom Vice President, Chairman of the Board Corporate Controller of Directors and Director and Acting Chief Financial Officer Directors: /s/ D. Wayne Gittinger /s/ John N. Nordstrom ------------------------------- ---------------------------------- D. Wayne Gittinger John N. Nordstrom Director Director /s/ Enrique Hernandez, Jr. /s/ Alfred E. Osborne, Jr. ------------------------------- ---------------------------------- Enrique Hernandez, Jr. Alfred E. Osborne, Jr. Director Director 19 of 22 20 Directors (continued): /s/ Ann McLaughlin Korologos /s/ William D. Ruckelshaus ------------------------------- ---------------------------------- Ann McLaughlin Korologos William D. Ruckelshaus Director Director /s/ John A. McMillan /s/ Bruce G. Willison ------------------------------- ---------------------------------- John A. McMillan Bruce G. Willison Director Director Date: April 11, 2001 -------------- 20 of 22 21 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 Statement Nos. 33-18321, 333-63403, 333-40064, 333-40066 and 333-79791 on Form S-8 and in Registration Statement Nos. 333-69281 and 333-50028 on Form S-3 of Nordstrom, Inc. of our reports dated March 21, 2001 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, 2001. We have audited the consolidated financial statements of Nordstrom, Inc. and subsidiaries as of January 31, 2001 and 2000, and for each of the three years in the period ended January 31, 2001, and have issued our report thereon dated March 21, 2001; such financial statements and report are included in your 2000 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. /s/Deloitte & Touche LLP Seattle, Washington April 11, 2001 21 of 22 22 NORDSTROM, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Dollars in thousands)
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 ----------- ---------- ---------- ---------- --------- Allowance for doubtful accounts: Year ended: January 31, 1999 $30,384 $23,827 $29,668 $24,543 January 31, 2000 $24,543 $11,707 $20,412 $15,838 January 31, 2001 $15,838 $20,369 $19,676 $16,531
22 of 22 23 NORDSTROM INC. AND SUBSIDIARIES Exhibit Index
Exhibit Method of Filing ------- ---------------- 3.1 Articles of Incorporation Incorporated by reference from the as amended and restated Registrant's Form 10-Q for the quarter ended April 30, 1999, Exhibit 3.1. 3.2 By-laws, as amended and Filed herewith electronically restated on August 31, 2000 4.1 Indenture between Registrant and Incorporated by reference from Registration Norwest Bank Colorado, N.A., as No. 333-47035, Exhibit 4.1. trustee, dated March 11, 1998 4.2 Senior indenture between Registrant Incorporated by reference and Norwest Bank Colorado, N.A., from Registration No. 333- as trustee, dated January 13, 1999 69281, Exhibit 4.3. 4.3 Form of Subordinated Indenture Incorporated by reference between Registrant and Norwest from Registration No. 333- Bank Colorado, N.A., as trustee, 69281, Exhibit 4.4. dated January 13, 1999 10.1 Merchant Agreement dated August 30, Incorporated by reference from the 1991 between Registrant and Registrant's Quarterly Report on Form Nordstrom National Credit Bank 10-Q for the quarter ended July 31, 1991, Exhibit 10.1. 10.2 Nordstrom Supplemental Retirement Plan Incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1993, Exhibit 10.3. 10.3 1993 Non-Employee Director Stock Incorporated by reference from the Incentive Plan Registrant's Form 10-K for the year ended January 31, 1994, Exhibit 10.4. 10.4 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. 10.5 Master Pooling and Servicing Incorporated by reference from the Agreement dated August 14, 1996 Registrant's Quarterly Report on between Nordstrom National Credit Form 10-Q for the quarter ended Bank and Norwest Bank Colorado, October 31, 1996, Exhibit 10.1. N.A., as trustee
24 10.6 Series 1996-A Supplement to Master Incorporated by reference Pooling and Servicing Agreement from the Registrant's dated August 14, 1996 between Quarterly Report on Form Nordstrom National Credit Bank, 10-Q for the quarter ended Nordstrom Credit, Inc. and Norwest October 31, 1996, Exhibit Bank Colorado, N.A., as trustee 10.2. 10.7 First amendment to the Series 1996-A Incorporated by reference Supplement to Master Pooling and from the Nordstrom Credit, Inc. Servicing Agreement dated August Form 10-K for the year ended 14, 1996 between Nordstrom National January 31, 1998, Exhibit Credit Bank, Nordstrom Credit, Inc. 10.13. and Norwest Bank Colorado, N.A., as trustee, dated December 10, 1997 10.8 Second Amendment to the Series 1996-A Incorporated by reference Supplement to Master Pooling and from the Nordstrom Credit, Servicing Agreement dated August Inc. Form 10-Q for the quarter 14, 1996, between Nordstrom Credit, ended April 30, 1999, Exhibit 10.1. Inc., Nordstrom National Credit Bank and Norwest Bank Colorado, N.A., as trustee, dated February 25, 1999 10.9 Transfer and Administration Agreement Incorporated by reference from the dated August 14, 1996 between Registrant's Quarterly Report on Nordstrom National Credit Bank, Form 10-Q for the quarter ended Enterprise Funding Corporation and October 31, 1996, Exhibit 10.3. Nationsbank, N.A. 10.10 First Amendment to the Transfer and Incorporated by reference from the Administration Agreement dated Registrant's Form 10-Q for the August 19, 1997 between Enterprise quarter ended April 30, 1999, Funding Corporation, Nordstrom Exhibit 10.1. National Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. 10.11 Second Amendment to the Transfer and Incorporated by reference from the Administration Agreement dated July Registrant's Form 10-Q for the 23, 1998 between Enterprise Funding quarter ended April 30, 1999, Corporation, Nordstrom National Exhibit 10.2. Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. 10.12 Receivables Purchase Agreement Incorporated by reference dated August 14, 1996 between from the Registrant's Form Registrant and Nordstrom Credit, 10-K for the year ended Inc. January 31, 1997, Exhibit 10.12. 10.13 1997 Nordstrom Stock Option Plan Incorporated by reference from the Registrant's Form 10-Q for the quarter Ended April 30, 1999, Exhibit 10.4. 10.14 The Nordstrom, Inc. Profit Sharing Incorporated by reference from the and Employee Deferral Retirement Registrant's Report on Form S-8, Plan Registration No. 333-79791 filed on June 2, 1999.
25 10.15 Amended and Restated Revolving Incorporated by reference from the Credit Facility between Registrant Registrant's Form 10-Q for the and a group of commercial banks, quarter ended October 31, 1999, dated October 15, 1999 Exhibit 10.1. 10.16 Commercial Paper Dealer Agreement Incorporated by reference from the dated October 2, 1997 between Registrant's Quarterly Report on Registrant and Bancamerica Form 10-Q for the quarter ended Securities, Inc. October 31, 1997, Exhibit 10.1. 10.17 Commercial Paper Agreement dated Incorporated by reference from the October 2, 1997 between Registrant Registrant's Quarterly Report on and Credit Suisse First Boston Form 10-Q for the quarter ended Corporation October 31, 1997, Exhibit 10.2. 10.18 Issuing and Paying Agency Agreement Incorporated by reference from the dated October 2, 1997 between Registrant's Quarterly Report on Registrant and First Trust of New Form 10-Q for the quarter ended York, N.A. October 31, 1997, Exhibit 10.3. 10.19 Joint Venture Agreement between Incorporated by reference from the Nordstrom, Inc. and Nordstorm.com, Registrant's Form 10-K for the Inc. dated as of August 24, 1999 year ended January 31, 2000, Exhibit 10.21. 10.20 Credit Agreement dated as of Incorporated by reference from the February 29, 2000, between 1700 Registrant's Form 10-K for the Seventh L.P., several lenders from year ended January 31, 2000, time to time party thereto, with Bank Exhibit 10.22. of America, N.A. as Administrative Agent and as Project Administrative Agent 10.21 Guaranty Agreement dated as of Incorporated by reference from the February 29, 2000, between Registrant, Registrant's Form 10-K for the Bank of America, N.A., and the Lenders year ended January 31, 2000, party to the Credit Agreement(described Exhibit 10.23. in 10.20 above), 10.22 Third Amendment to the Transfer Incorporated by reference from the and Administration Agreement dated Registrant's Form 10-Q for the August 11, 1999 between Enterprise quarter ended July 31, 2000, Funding Corporation, Nordstrom National Exhibit 10.1. Credit Bank, The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. 10.23 Fourth Amendment to the Transfer and Incorporated by reference from the Administration Agreement dated Registrant's Form 10-Q for the March 1, 2000 between Enterprise quarter ended July 31, 2000, Funding Corporation, Nordstrom fsb, Exhibit 10.2. The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A. 10.24 Fifth Amendment to the Transfer and Incorporated by reference from the Administration Agreement dated Registrant's Form 10-Q for the July 20, 2000 between Enterprise quarter ended July 31, 2000, Funding Corporation, Nordstrom fsb, Exhibit 10.3. The Financial Institutions From Time to Time Parties Thereto, and Nationsbank, N.A.
26 10.25 First Amendment to the Master Pooling Incorporated by reference from the and Servicing Agreement dated Registrant's Form 10-Q for the March 1, 2000, between Nordstrom fsb quarter ended July 31, 2000, and Wells Fargo Bank West, N.A., Exhibit 10.4. as trustee. 10.26 Share Purchase and Contribution Incorporated by reference from the Agreement dated as of September Registrant's Form S-3, 27, 2000 by and among Nordstrom, Inc., Registration No. 333-50028 Nordstrom European Capital Group, filed on November 15, 2000, and the Selling Shareholders of Exhibit 2.1. Faconnable, S.A. 10.27 Amendment to the Share Purchase and Incorporated by reference from the Contribution Agreement dated as of Registrant's Form S-3, October 20, 2000 by and among Registration No. 333-50028 Nordstrom, Inc., Nordstrom European filed on November 15, 2000, Capital Group, and the Selling Exhibit 2.2 Shareholders of Faconnable, S.A. 10.28 The Put Agreement dated November Incorporated by reference from the 1, 1999 between Nordstrom, Inc. Registrant's Form 10-Q for the and the holders of the Series C quarter ended October 31, 2000, Preferred Stock of Nordstrom.com, Inc. Exhibit 10.3. 13.1 2000 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 as page 21 of this report