-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TvD9rQxd0dqM0GK75n+2/ItDDtNWF+jExNtMty3Ken6oB1H8J6VmBvYKHopqsYSE bmaR546/i0rRCBMfXm8EyA== 0000757439-96-000003.txt : 19960401 0000757439-96-000003.hdr.sgml : 19960401 ACCESSION NUMBER: 0000757439-96-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960329 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORDSTROM CREDIT INC CENTRAL INDEX KEY: 0000757439 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 911181301 STATE OF INCORPORATION: CO FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12994 FILM NUMBER: 96540731 BUSINESS ADDRESS: STREET 1: 13531 E CALEY CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3033974700 MAIL ADDRESS: STREET 1: 1321 SECOND AVENUE CITY: SEATTLE STATE: WA ZIP: 98101 10-K 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, 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 office) (Zip code) Registrant's telephone number, including area code: 303-397-4700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.50 par value _______________________________ (Title of class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES /X/ NO / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/ On March 29, 1996 Registrant had 10,000 shares of Common stock ($.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 J(1)(a) and (b)of Form 10-K and is therefore filing this Form with the reduced disclosure format. 1 of 18 PART I Item 1. Business. - ------------------ The information required under this item is included in Note 1 to the Financial Statements on page 13 of this report, which is incorporated herein by reference. Item 2. Properties. - -------------------- The Company owns an office building in Englewood, Colorado where it locates its principal offices. Item 3. Legal Proceedings. - --------------------------- The Company is not a party to any material legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. - ------------------------------------------------------------- Not required under reduced disclosure format. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters - ------------------------------------------------------------------------------ The class of securities registered is the Company's Common Stock, $.50 par value per share. There are 100,000 shares of authorized Common Stock, of which 10,000 shares were issued and outstanding as of March 29, 1996. The Company's common stock is owned entirely by Nordstrom, Inc. The stock has not been traded and, accordingly, no market value has been established. In addition, no dividends have been paid or declared. Item 6. Selected Financial Data. - --------------------------------- Not required under reduced disclosure format. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. - ------------------------------------------------------------------------- Service charge income and service fees paid to Nordstrom National Credit Bank (the "Bank") increased in 1995 primarily due to an increase in receivables generated by the Bank's VISA card program, which commenced in May, 1994. Interest expense increased in 1995 due to higher levels of debt outstanding. Bad debt expense increased in 1995 as a result of the growth of the Bank's VISA card program, for which the Company bears credit risk. 2 of 18 Certain other information required under this item is included in Note 1 and Note 5 to the Financial Statements on pages 13 and 14 respectively, of this report, which are incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. - ---------------------------------------------------- A) Financial Statements and Supplementary Data The financial statements listed in the Index to Financial Statements and Schedule on page 7 of this Report are incorporated herein by reference. B) Other Financial Statements and Schedule The schedule required under Regulation S-X is filed pursuant to Item 14 of this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. - ------------------------------------------------------------------------ None PART III Item 10. Directors and Executive Officers of the Registrant. - ------------------------------------------------------------ Not required under reduced disclosure format. Item 11. Executive Compensation. - -------------------------------- Not required under reduced disclosure format. Item 12. Security Ownership of Certain Beneficial Owners and Management. - ------------------------------------------------------------ Not required under reduced disclosure format. Item 13. Certain Relationships and Related Transactions. - -------------------------------------------------------- Not required under reduced disclosure format. 3 of 18 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. - -------------------------------------------------------------------------- (a)1. Financial Statements -------------------- The following financial statements of the Company and the Independent Auditors' Report are incorporated by reference in Part II, Item 8: Independent Auditors' Report Statements of Earnings Balance Sheets Statements of Investment of Nordstrom, Inc. Statements of Cash Flows Notes to Financial Statements (a)2. Financial Statement Schedules ----------------------------- The financial statement schedule listed in the Index to Financial Statements and Schedule on page 7 of this Report is incorporated herein by reference. (a)3. Exhibits -------- (3.1) Articles of Incorporation of the Registrant are hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1991, Exhibit 3.1. (3.2) By-laws of the Registrant are hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1991, Exhibit 3.2. (3.3) Amendment to the Bylaws of the Registrant dated December 19, 1995, is filed herein as an Exhibit. (4.1) Indenture between Registrant and First Interstate Bank of Denver, N.A., as successor trustee, dated November 15, 1984, the First Supplement thereto dated January 15, 1988, the Second Supplement thereto dated June 1, 1989, and the Third Supplement thereto dated October 19, 1990 are hereby incorporated by reference from Registration No. 33-3765, Exhibit 4.2; Registration No. 33-19743, Exhibit 4.2; Registration No. 33-29193, Exhibit 4.3; and Registrant's Annual Report on Form 10-K for the year ended January 31, 1991, Exhibit 4.2, respectively. (4.2) Trustee Resignation of First Interstate Bank of Washington, N.A. dated March 13, 1995 is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1995, Exhibit 4.2. (4.3) Trustee Acceptance of First Interstate Bank of Denver, N.A. dated March 13, 1995 is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1995, Exhibit 4.3. 4 of 18 (10.1) Investment Agreement dated October 8, 1984 between Registrant and Nordstrom, Inc. is hereby incorporated by reference from the Registrant's Form 10, Exhibit 10.1. (10.2) Operating Agreement dated August 30, 1991 between Registrant and Nordstrom National Credit Bank is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended July 31, 1991, Exhibit 10.1, as amended. (10.3) Operating Agreement for VISA Accounts and Receivables dated May 1, 1994 between Registrant and Nordstrom National Credit Bank is hereby incorporated by reference from Registration No. 33-55905, Exhibit 10.1. (10.4) Credit Agreement dated June 23, 1995 between Registrant and a group of commercial banks is hereby incorporated by reference from the Registrant's Form 10-Q for the quarter ended July 31, 1995, Exhibit 10.1. (10.5) Loan Agreement dated November 24, 1992 between Registrant and Nordstrom, Inc. is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1993, Exhibit 10.6. (10.6) Loan Agreement dated June 10, 1985, as amended May 19, 1994, between Registrant and Morgan Guaranty Trust Company of New York is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1995, Exhibit 10.10. (12.1) Computation of Ratio of Earnings Available for Fixed Charges to Fixed Charges is filed herein as an Exhibit. (23.1) Independent Auditors' Consent is filed herein as an Exhibit. (27.1) Financial Data Schedule is filed herein as an Exhibit. All other exhibits are omitted because they are not applicable, or not required, or because the required information is included in the financial statements or notes thereto. (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. 5 of 18 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 CREDIT, INC. (Registrant) Date March 29, 1996 by /s/ John A. Goesling __________________ ____________________________________________ John A. Goesling Executive Vice President and Treasurer (Principal Accounting and Financial Officer) 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. /s/ John A. Goesling /s/ Raymond A. Johnson _____________________________________ _____________________________________ John A. Goesling Raymond A. Johnson Director, Executive Vice President Director and Treasurer (Principal Accounting and Financial Officer) /s/ John C. Walgamott /s/ John J. Whitacre _____________________________________ ______________________________________ John C. Walgamott John J. Whitacre Director and President Director (Principal Executive Officer) Date March 29, 1996 ______________________ 6 of 18 NORDSTROM CREDIT, INC. INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Page Number ------ Independent Auditors' Report 8 Statements of Earnings 9 Balance Sheets 10 Statements of Investment of Nordstrom, Inc. 11 Statements of Cash Flows 12 Notes to Financial Statements 13 Additional financial information required to be furnished - Financial Statement Schedule: II - Valuation and Qualifying Accounts 18
All other schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere in the financial statements or notes thereto. 7 of 18 INDEPENDENT AUDITORS' REPORT Board of Directors Nordstrom Credit, Inc. Englewood, Colorado We have audited the accompanying balance sheets of Nordstrom Credit, Inc. as of January 31, 1996 and 1995, and the related statements of earnings, investment of Nordstrom, Inc. and cash flows for each of the three years in the period ended January 31, 1996. Our audits also included the financial statement schedule listed in Item 14(a)2. These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Nordstrom Credit, Inc. as of January 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 1996, in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. Deloitte & Touche LLP Seattle, Washington March 8, 1996 8 of 18 NORDSTROM CREDIT, INC. STATEMENTS OF EARNINGS (Dollars in thousands)
Year Ended January 31, 1996 1995 1994 - ---------------------- ------- ------- ------- Revenue: Service charge income $122,973 $92,592 $91,026 Rental income from Nordstrom National Credit Bank 1,044 1,044 1,044 ------- ------- ------- Total revenue 124,017 93,636 92,070 Expenses: Interest, net 42,157 31,074 29,465 Service fees paid to Nordstrom National Credit Bank 32,558 28,056 28,551 Bad debts 12,752 940 - Other general and administrative 1,464 1,521 1,682 ------- ------- ------- Total expenses 88,931 61,591 59,698 ------- ------- ------- Earnings before income taxes 35,086 32,045 32,372 Income taxes 12,600 11,600 11,700 ------- ------- ------- Net earnings $ 22,486 $20,445 $20,672 ======= ======= ======= Ratio of earnings available for fixed charges to fixed charges 1.83 2.03 2.09 ======= ======= ======= See notes to financial statements.
9 of 18 NORDSTROM CREDIT, INC. BALANCE SHEETS (Dollars in thousands)
January 31, 1996 1995 - ----------- -------- -------- ASSETS - ------ Cash and cash equivalents $ 91 $ 440 Customer accounts receivable, net 874,858 656,263 Other accounts receivable 7,217 4,807 Property and equipment, net 5,396 5,685 Other assets 2,122 1,429 -------- -------- $889,684 $668,624 ======== ======== LIABILITIES AND INVESTMENT OF NORDSTROM, INC. - --------------------------------------------- Notes payable to Nordstrom, Inc. $ 86,000 $148,000 Notes payable to bank 50,000 50,000 Commercial paper 182,501 37,388 Accrued interest, taxes and other 9,424 10,963 Long-term debt 369,100 252,100 -------- -------- Total liabilities 697,025 498,451 Investment of Nordstrom, Inc. 192,659 170,173 -------- -------- $889,684 $668,624 ======== ======== See notes to financial statements.
10 of 18 NORDSTROM CREDIT, INC. STATEMENTS OF INVESTMENT OF NORDSTROM, INC. (Dollars in thousands except per share amount)
Common Stock, $.50 par value, 100,000 shares authorized ------------------------- Retained Shares Amount Earnings Total ------ ------ -------- ----- Balance at February 1, 1993 10,000 $55,058 $ 73,998 $129,056 Net earnings - - 20,672 20,672 ------ ------- ------- -------- Balance at January 31, 1994 10,000 55,058 94,670 149,728 Net earnings - - 20,445 20,445 ------ ------- ------- -------- Balance at January 31, 1995 10,000 55,058 115,115 170,173 Net earnings - - 22,486 22,486 ------ ------- ------- -------- Balance at January 31, 1996 10,000 $55,058 $137,601 $192,659 ====== ======= ======== ======== See notes to financial statements.
11 of 18 NORDSTROM CREDIT, INC. STATEMENTS OF CASH FLOWS (Dollars in thousands)
Year Ended January 31, 1996 1995 1994 - ---------------------- ------- ------- ------- OPERATING ACTIVITIES: Net earnings $ 22,486 $20,445 $20,672 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 772 924 640 Change in: Other accounts receivable (2,410) (830) (269) Accrued interest, taxes and other (1,539) 1,298 (304) ------- ------- ------- Net cash provided by operating activities 19,309 21,837 20,739 ------- ------- ------- INVESTING ACTIVITIES: (Increase) decrease in investment in customer accounts receivable, net (218,595) (91,768) 18,716 Additions to property and equipment, net (35) (30) (167) ------- ------- ------- Net cash (used in) provided by investing activities (218,630) (91,798) 18,549 ------- ------- ------- FINANCING ACTIVITIES: (Decrease) increase in notes payable to Nordstrom, Inc. (62,000) 35,500 - Increase in notes payable to banks - 25,000 - Increase in commercial paper 145,113 22,051 2,018 Proceeds from issuance of long-term debt, net 140,859 49,656 - Principal payments on long-term debt (25,000) (63,500) (40,000) ------- ------- ------- Net cash provided by (used in) financing activities 198,972 68,707 (37,982) ------- ------- ------- Net (decrease) increase in cash and cash equivalents (349) (1,254) 1,306 Cash and cash equivalents at beginning of year 440 1,694 388 ------- ------- ------- Cash and cash equivalents at end of year $ 91 $ 440 $ 1,694 ======== ======= ======= See notes to financial statements.
12 of 18 NORDSTROM CREDIT, INC. NOTES TO FINANCIAL STATEMENTS (Dollars in thousands) NOTE 1 - DESCRIPTION OF BUSINESS Nordstrom Credit, Inc. (the "Company"), a wholly-owned subsidiary of Nordstrom, Inc. ("Nordstrom") was incorporated in the State of Washington in 1982 and reincorporated in the State of Colorado in 1990. The primary business of the Company is to finance customer accounts receivable generated under revolving charge accounts through sales of merchandise in Nordstrom stores ("Accounts"), and through purchases by customers using the Nordstrom National Credit Bank the "Bank") VISA cards ("VISA Accounts"). The Accounts and the VISA Accounts are originated through the use of credit cards issued by the Bank, a national banking association organized as a wholly-owned subsidiary of Nordstrom, effective August 30, 1991. The Bank's VISA card program commenced in May 1994. The Company and the Bank are parties to an Operating Agreement dated August 30, 1991 (the "Operating Agreement") pursuant to which the Company purchases Accounts from the Bank for a price equal to the amount of Accounts originated less an allowance for amounts to be written off (the "holdback allowance"). The Company and the Bank are also parties to an Operating Agreement for VISA Accounts and Receivables (the "VISA Operating Agreement") dated May 1, 1994. Under this agreement, the Company purchases VISA Accounts from the Bank under the same terms and conditions as the Operating Agreement, with the exception of the allowance for amounts to be written off. Amounts written off are charged to the Company, except for amounts written off with respect to sales occurring at Nordstrom stores, for which Nordstrom has agreed to indemnify the Company. Under the terms of both Operating Agreements, the Bank performs the servicing functions for the Accounts and the VISA Accounts, and the Company pays the Bank a servicing fee based on the amount of such Accounts originated. The rate was 1.59% until November 30, 1995 and was increased to 2.0% effective December 1, 1995. The Company and Nordstrom are parties to an Investment Agreement dated October 8, 1984 (the "Investment Agreement") which, among other things, governs ownership of Company stock and the financial relationships between Nordstrom and the Company. The Investment Agreement requires that Nordstrom maintain the Company's ratio of earnings available for fixed charges to fixed charges at not less than 1.25:1 and further requires that Nordstrom retain ownership of all the outstanding shares of stock of the Company. This agreement does not, however, represent a guarantee by Nordstrom of the payment of any obligation of the Company. The presentation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses in the accompanying financial statements. Actual results could differ from those estimates. Certain reclassifications of prior year balances have been made for consistent presentation. 13 of 18 NOTE 2 - RENTAL INCOME The Company owns an office building in Englewood, Colorado, and leases space in the building to the Bank under a month-to-month agreement for $87 per month. NOTE 3 - INTEREST EXPENSE The components of net interest expense are as follows:
Year ended January 31, 1996 1995 1994 - ---------------------- ------- ------- ------- Notes payable to Nordstrom, Inc. $ 4,273 $ 2,940 $ 1,696 Notes payable to banks 2,942 1,766 771 Commercial paper 7,242 3,320 1,590 Long-term debt 27,788 23,161 25,543 ------- ------- ------- Total interest expense 42,245 31,187 29,600 Less: Interest income (88) (113) (135) ------- ------- ------- Interest, net $42,157 $31,074 $29,465 ======= ======= =======
NOTE 4 - INCOME TAXES The Company files consolidated income tax returns with Nordstrom. Income taxes have been provided on a separate return basis, and the difference between the effective tax rate and the statutory Federal income tax rate is due to the provision for state and local income taxes. At January 31, 1996 and 1995, amounts due to Nordstrom for income taxes totaled $1,200 and $1,500. The Company has no significant deferred taxes. NOTE 5 -CUSTOMER ACCOUNTS RECEIVABLE Customer accounts receivable, net, consists of the following:
January 31, 1996 1995 - ----------- -------- -------- Accounts $690,756 $592,034 VISA Accounts 213,495 87,187 -------- -------- 904,251 679,221 Holdback allowance (29,393) (22,958) -------- -------- Customer accounts receivable, net $874,858 $656,263 ======== ========
The Company has no credit risk with respect to the Accounts, as Nordstrom bears the risk of credit loss with respect to these Accounts. 14 of 18 NOTE 5 (continued) The Company's credit risk with respect to Visa Accounts is concentrated in the geographic regions in which Nordstrom operates stores. At January 31, 1996 and 1995, approximately 50% of the VISA Accounts were concentrated in California. Concentration of the remaining VISA Accounts is considered to be limited due to their geographical dispersion. NOTE 6 - OTHER ACCOUNTS RECEIVABLE Other accounts receivable consists of amounts due from the Bank for net activity in Accounts and VISA Accounts, less service fees due the Bank. These amounts are settled on a second business day basis. At January 31, 1996, other accounts receivable also includes $2,975 due from Nordstrom primarily for settlement of bad debt expense, which was settled on February 26, 1996. NOTE 7 - NOTES PAYABLE AND COMMERCIAL PAPER The notes payable to bank represents amounts borrowed from a commercial bank as fiduciary under a master note agreement which provides for borrowings up to $50,000. Borrowings under the Agreement bear interest at floating rates based on a published short-term interest rate composite index (5.4% and 6.0% at January 31, 1996 and 1995) and mature up to six months from the date of borrowing or on demand. The notes payable to Nordstrom, Inc. represents amounts borrowed from Nordstrom under an Agreement dated November 24, 1992 which provides for borrowings from time to time, depending on seasonal cash flow requirements. Borrowings under the Agreement bear interest at floating rates based on a published short-term interest rate composite index (5.4% and 6.0% at January 31, 1996 and 1995) and mature up to six months from the date of borrowing or on demand. Commercial paper outstanding at January 31, 1996 bears interest at 5.1% to 5.8%, and matures from February 1, 1996 to July 15, 1996. A summary of notes payable and commercial paper is as follows:
Year ended January 31, 1996 1995 1994 - ---------------------- -------- -------- -------- Average daily borrowings outstanding: Nordstrom $ 72,843 $ 60,651 $ 54,643 Other 172,178 104,722 75,300 Maximum amount outstanding: Nordstrom 191,500 204,000 182,500 Other 303,072 209,605 117,023 Weighted average interest rate: During the year: Nordstrom 5.9% 4.8% 3.1% Other 5.9% 4.9% 3.1% At year-end: Nordstrom 5.4% 6.0% 3.0% Other 5.5% 6.0% 3.1%
15 of 18 NOTE 7 (continued) The Company has a $300,000 unsecured line of credit with a group of commercial banks which is available as liquidity support for notes payable to bank and commercial paper issued by the Company, and expires June 30, 2000. Under the terms of the line of credit agreement, the Company must, among other things, comply with the terms of the Investment Agreement between the Company and Nordstrom and the Operating Agreements between the Company and the Bank, and maintain a ratio of total debt to tangible net worth no greater than 7 to 1. The Company pays commmitment fees for the line in lieu of compensating balance requirements. The carrying amount of the notes payable and commercial paper approximates fair value because of the short maturity of these instruments. NOTE 8 - LONG-TERM DEBT Long-term debt consists of the following:
January 31, 1996 1995 - ----------- -------- -------- Medium-term notes, 7.83% - 9.6%, due 1996 - 2001 $226,000 $209,000 Notes Payable, 6.7%, due 2005 100,000 - Sinking fund debentures, 9.375%, due 2016, payable in annual installments of $3,750 beginning in 1997 43,100 43,100 -------- -------- Total long-term debt $369,100 $252,100 ======== ========
Aggregate principal payments on long-term debt for the next five fiscal years are as follows: 1996 - $73,000, 1997 - $53,750, 1998 - $53,750, 1999 - $3,750, and 2000 - $45,750. The fair value of long-term debt at January 31, 1996 and 1995, estimated using quoted market prices of the same or similar issues with the same remaining maturity, was approximately $403,000 and $257,000. In February 1996, the Company prepaid $43,100 of sinking fund debentures at a premium of $1,965. 16 of 18 NOTE 9 - SUPPLEMENTARY CASH FLOW INFORMATION For purposes of the Statements of Cash Flows, the Company considers all short-term investments with a maturity at date of purchase of three months or less to be cash equivalents. The carrying amount approximates fair value because of the short maturity of these instruments. Supplementary cash flow information is as follows:
Year Ended January 31, 1996 1995 1994 - ---------------------- ------- ------- ------- Cash paid during the year for: Interest $41,268 $30,005 $30,224 Income taxes paid to Nordstrom, Inc. 12,900 11,692 11,568
17 of 18 NORDSTROM CREDIT, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Dollars in thousands)
Column A Column B Column C Column D Column E Additions Deductions - ----------- ---------- -------------------- ------------------- -------- Account Balance Charged to Charged write-offs Balance beginning costs and to other net of end of Description of period expenses accounts recoveries period - ----------- ----------- --------- -------- ---------- ------- Holdback allowance - customer accounts receivable Year ended January 31, 1994 $23,969 $ - $25,713* $26,537 $23,145 Year ended January 31, 1995 $23,145 $ 940 $19,279* $20,406 $22,958 Year ended January 31, 1996 $22,958 $12,752 $26,837* $33,154 $29,393 * The Company purchases Accounts net of this amount which represents the allowance for uncollectible amounts. Bad debt expenses are reflected on the books of Nordstrom for Accounts and VISA Accounts generated through sales at Nordstrom stores.
18 of 18
EXHIBIT INDEX EXHIBIT METHOD OF FILING - ------------------------------------------ ----------------------------------- 3.1 Articles of Incorporation Incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1991, Exhibit 3.1. 3.2 By-laws Incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1991, Exhibit 3.2. 3.3 Amendment to the By-laws dated Filed herewith electronically. December 19, 1995 4.1 Indenture between Registrant and Incorporated by reference from First Interstate Bank of Denver, Registration No. 33-3765, Exhibit N.A., as successor trustee, dated 4.2; Registration No. 33-19743, November 15, 1984, the First Sup- Exhibit 4.2; Registration No. plement thereto dated January 15, 33-29193, Exhibit 4.3, and 1988, the Second Supplement thereto Registrant's Annual Report on Form dated June 1, 1989, and the Third 10-K for the year ended January 31, Supplement thereto dated October 1991, Exhibit 4.2, respectively. 19, 1990 4.2 Trustee Resignation of First Inter- Incorporated by reference from state Bank of Washington, N.A. Registrant's Form 10-K for the dated March 13, 1995 year ended January 31, 1995, Exhibit 4.2. 4.3 Trustee Acceptance of First Inter- Incorporated by reference from state Bank of Denver, N.A. dated Registrant's Form 10-K for the March 13, 1995 year ended January 31, 1995, Exhibit 4.3. 10.1 Investment Agreement dated October Incorporated by reference from 8, 1984 between Registrant and Registrant's Form 10, Exhibit 10.1. Nordstrom, Inc. 10.2 Operating Agreement dated August Incorporated by reference from 30, 1991 between Registrant and Registrant's Form 10-Q for the Nordstrom National Credit Bank quarter ended July 31, 1991, Exhibit 10.1, as amended.
10.3 Operating Agreement for VISA Incorporated by reference from Accounts and Receivables Registration No. 33-55905, Exhibit dated May 1, 1994 between 10.1. Registrant and Nordstrom National Credit Bank 10.4 Credit Agreement dated June 23, 1995 Incorporated by reference from between Registrant and a group of Registrant's Form 10-Q for the commercial banks. quarter ended July 31, 1995, Exhibit 10.1. 10.5 Loan Agreement dated November 24, Incorporated by reference from 1992 between Registrant and Registrant's Form 10-K for the Nordstrom, Inc. year ended January 31, 1993, Exhibit 10.6. 10.6 Loan Agreement dated June 10, 1985, Incorporated by reference from as amended May 16, 1994, between Registrant's Form 10-K for the Registrant and Morgan Guaranty year ended January 31, 1995, Trust Company of New York Exhibit 10.10. 12.1 Computation of Ratio of Earnings Filed herewith electronically. Available for Fixed Charges to Fixed Charges 23.1 Independent Auditors' Consent Filed herewith electronically. 27.1 Financial Data Schedule Filed herewith electronically.
Exhibit 12.1 NORDSTROM CREDIT, INC. Computation of Ratio of Earnings Available for Fixed Charges to Fixed Charges (Dollars in thousands)
Year ended January 31, 1996 1995 1994 1993 1992 - ---------------------- ------- ------- ------- ------- ------- Earnings before income taxes $35,086 $32,045 $32,372 $29,321 $24,023 Fixed charges (gross interest expense) 42,245 31,187 29,600 33,841 35,037 ------- ------- ------- ------- ------- Earnings available for fixed charges $77,331 $63,232 $61,972 $63,162 $59,060 ======= ======= ======= ======= ======= Ratio of earnings available for fixed charges to fixed charges 1.83 2.03 2.09 1.87 1.69 ======= ======= ======= ======= =======
Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Amendment No. 1 to Registration Statement No. 33-55905 of Nordstrom Credit, Inc. on Form S-3 of our report dated March 8, 1996, appearing in this Annual Report on Form 10-K of Nordstrom Credit, Inc. for the year ended January 31, 1996. DELOITTE & TOUCHE LLP Seattle, Washington March 29, 1996 EX-3 2 BYLAWS OF NORDSTROM CREDIT, INC. ARTICLE I Offices The principal place of business of the corporation in the state of Colorado shall be located at 13531 East Caley, Englewood, Colorado 80111. The corporation may have such other offices, either within or without the state as the Board of Directors may designate or as the business of the corporation may require from time to time. The registered office of the corporation required by the Colorado Business Corporation Act to be maintained in the state of Colorado may be, but need not be, identical with the principal office in the state of Colorado, and the address of the registered office and the registered agent may be changed from time to time by the Board of Directors or by officers designated by the Board of Directors upon filing a statement as specified by law in the Office of the Secretary of State of Colorado. The initial registered office and registered agent are as specified in the Articles of Incorporation. ARTICLE II Shareholders Section 1. Annual Meetings. The annual meeting of the shareholders shall be held on the third Tuesday in the month of May in each year at the hour of two o'clock p.m., or any other times as fixed by action of the shareholders, for the purpose of electing directors and the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the state of Colorado, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be. Section 2. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President or by the Board of Directors, or the holders of not less than one-tenth of all outstanding shares of the corporation entitled to vote at the meeting. Section 3. Place of Meeting. The Board of Directors may designate any place, either within or without the state of Colorado, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or without the state of Colorado, as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be 1501 Fifth Avenue, Seattle, Washington 98101. Section 4. Notice of Meetings. Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall, unless otherwise prescribed by statute, be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting; except that (i) if the authorized shares are to be increased, at least thirty days' notice shall be given, and (ii) when it is proposed that all or substantially all of the property and assets of the corporation be sold, leased, exchanged or otherwise disposed of other than in the usual course of business or other than in liquidation (but not by way of mortgage or pledge), at least twenty days' notice shall be given. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. Section 5. Closing of Transfer Books or Fixing of Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, fifty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made, as provided in this section, such determination shall apply to any adjournment thereof. Section 6. Voting Record. For at least ten days before each meeting, the officer or agent having charge of the stock transfer books for shares of the corporation shall make and keep on file at the registered office of the corporation a complete record of the shareholders entitled to vote at that meeting of shareholders or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each. That record shall be produced and kept open at the principal office of the corporation and at the time and place of the meeting and shall be subject to the inspection of any shareholder during usual business hours of the corporation and during the whole time of the meeting for the purposes thereof. Section 7. Quorum. A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 8. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. Section 9. Voting of Shares. Each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders and, if a quorum is present, the affirmative vote of the majority of such shares represented at the meeting shall be the act of the shareholders. Section 10. Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the Bylaws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so be contained in an appropriate order of the court by which such receiver is appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Neither shares of its own stock held by the corporation, nor those held by another corporation if a majority of the shares entitled to vote for the election of directors of such other corporation are held by the corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting. Section 11. Informal Action by Shareholders. Any action required to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such consent may be executed in counterparts and shall be effective as of the date of the last signature thereon, unless the consent specifies a different effective date. The record date for determining shareholders entitled to take such action is the date the first shareholder signs the consent. ARTICLE III Board of Directors Section 1. General Powers. The business and affairs of the corporation shall be managed by its Board of Directors. Section 2. Number, Tenure and Qualifications. The number of directors of this corporation shall be no fewer than three; provided, however, that if all outstanding shares are held of record by fewer than three shareholders, then there need be only as many directors as there are shareholders of record. Subject to such limitation, the number of directors shall be fixed by resolution of the Board of Directors, and may be increased or decreased by resolution of the Board of Directors, but no decrease shall have the effect of shortening the term of any incumbent director. Each director shall hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified, or until removed from office if earlier removed with or without cause by affirmative vote of a majority of the outstanding shares entitled to vote. Directors need not be residents of the state of Colorado or shareholders of the corporation. Section 3. Regular Meeting. A regular meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the state of Colorado, for the holding of additional regular meetings without other notice than such resolution. Section 4. Special Meetings. Special meetings of the Board of Directors or any committee designated by the Board of Directors may be called by or at the request of the President or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the state of Colorado, as the place for holding any special meeting of the Board of Directors called by them. Section 5. Notice. Notice of any special meeting shall be given at least two days previously thereto by written notice delivered personally or mailed to each director at his business address, or by telegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director objects, at the beginning of the meeting, to the holding of the meeting or the transacting of business at the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 6. Quorum. A majority of the number of directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Section 7. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 8. Action Without a Meeting. Any action that may be taken by the Board of Directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors. Section 9. Removal. Any director or the entire Board of Directors may be removed, with or without cause, by affirmative vote of a majority of the outstanding shares entitled to vote at a meeting of shareholders called expressly for that purpose. Section 10. Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by election by the Board of Directors for a term of the office continuing only until the next election of directors by the shareholders. Section 11. Compensation. Unless and until otherwise provided by resolution of the Board of Directors, no salary or fees shall be payable to the directors for their services as directors or in connection with their attendance at meetings of directors. Section 12. Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he objects at the beginning of such meeting to the holding of such meeting or the transaction of business at such meeting, he contemporaneously requests that his dissent shall be entered in the minutes of the meeting, or he shall give his written dissent to such action to the person acting as the presiding officer of the meeting before the adjournment thereof, or to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. Section 13. Telephonic Meetings. Members of the Board of Directors or any committee designated by the Bylaws or appointed by the Board of Directors may participate in a meeting of such Board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at a meeting. ARTICLE IV Officers Section 1. Number. The officers of the corporation shall be a President, one or more Vice Presidents (the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer, each of whom shall be elected by the Board of Directors. In addition, the Board of Directors may appoint one or more assistant secretaries and assistant treasurers. Any two or more offices may be held by the same person, except the offices of President and Secretary, except that when all of the issued and outstanding stock of the corporation is owned of record by one shareholder, one person may hold all or any combination of offices. Section 2. Election and Term of Office. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Section 3. Resignation or Removal. Any officer or agent may be removed, with or without cause, by the Board of Directors, whenever in its judgment, the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 4 . Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. Section 5. President. The President shall have general supervision and control over the business and affairs of the corporation subject to the authority of the Board of Directors. He may sign, with the Secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; he may sign any and all documents in the ordinary course of business with or without the signature of a second corporate officer; and in general shall perform all duties incident to the office of President and such other duties, as may be prescribed by the Board of Directors from time to time. Section 6. The Vice President. In the absence of the President or in the event of his death, inability or refusal to act, the Executive Vice President, if one is designated, and otherwise the Vice Presidents in the order designated at the time of their election or in the absence of any designation, then in the order of their election, shall perform the duties of the President and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors. Section 7. The Secretary. The Secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents and the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholders; (e) sign with the President, or a Vice President, certificates for shares of the corporation, or contracts, deeds or mortgages the issuance or execution of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the corporation subject to the authority delegated to a transfer agent or registrar if appointed; and (g) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. Section 8. The Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for monies due and payable to the corporation from any source whatsoever, and deposit all such monies in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article VI of these Bylaws; and (c) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. Section 9. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries, when authorized by the Board of Directors, may sign with the President or a Vice President certificates for shares of the corporation or contracts, deeds or mortgages for the issuance or execution of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sum and with such surety or sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. Section 10. Compensation. The compensation of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. Election or appointment of an officer shall not of itself create a contractual right to compensation for services performed as such officer. ARTICLE V Executive Committee Section 1. Appointment. The Board of Directors by resolution adopted by a majority of the full Board, may designate two or more of its members to constitute an Executive Committee. The designation of such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. Section 2. Authority. The Executive Committee, when the Board of Directors is not in session, shall have and may exercise all of the authority of the Board of Directors except to the extent, if any, that such authority shall be limited by the resolution appointing the Executive Committee and except also that the Executive Committee shall not have the authority to do any of the following: (i) declare dividends or distributions; (ii) approve or recommend to shareholders actions or proposals required by the Colorado Business Corporation Act to be approved by shareholders; (iii) fill vacancies on the Board of Directors or any committee thereof; (iv) amend these Bylaws; (v) approve a plan of merger not requiring shareholder approval; (vi) reduce earned or capital surplus; (vii) authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the Board of Directors; or (viii) authorize or approve the issuance or sale of or any contract to issue or sell shares, or designate the terms of a series of a class of shares, except that the Board of Directors, having acted regarding general authorization for the issuance or sale of shares or any contract therefor and, in the case of a series, the designation thereof, may, pursuant to a general formula or method specified by the Board by resolution or by adoption of a stock option or other plan, authorize a committee to fix the terms of any contract for the sale of the shares and to fix the terms upon which such shares may be issued or sold, including, without limitation, the price, the dividend rate, provisions for redemption, sinking fund, conversion or voting or preferential rights, and provision for other features of a class of shares or a series of a class of shares, with full power in such committee to adopt any final resolution setting forth all terms thereof and to authorize the statement of the terms of a series for filing with the Secretary of State under the Colorado Business Corporation Act. Section 3. Tenure and Qualifications. Each member of the Executive Committee shall hold office until the next regular annual meeting of the Board of Directors following his designation and until his successor is designated as a member of the Executive Committee and is elected and qualified. Section 4. Meetings. Regular meetings of the Executive Committee may be held without notice at such times and places as the Executive Committee may fix from time to time by resolution. Special meetings of the Executive Committee may be called by any member thereof upon not less than one day's notice stating the place, date and hour of the meeting, which notice may be written or oral, and if mailed, shall be deemed to be delivered when deposited in the United States mail addressed to the member of the Executive Committee at his business address. Any member of the Executive Committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person. The notice of a meeting of the Executive Committee need not state the business proposed to be transacted at the meeting. Section 5. Quorum. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business at any meeting thereof and action of the Executive Committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Section 6. Action Without a Meeting. Any action that may be taken by the Executive Committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members of the Executive Committee. Section 7. Vacancies. Any vacancy in the Executive Committee may be filled by a resolution adopted by a majority of the full Board of Directors. Section 8. Resignations and Removal. Any member of the Executive Committee may be removed at any time with or without cause by resolution adopted by a majority of the full Board of Directors. Any member of the Executive Committee may resign from the Executive Committee at any time by giving written notice to the President or Secretary of the corporation, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 9. Procedure. The Executive Committee shall elect a presiding officer from its members and may fix its own rules of procedure which shall not be inconsistent with these Bylaws. It shall keep regular minutes of its proceedings and report the same to the Board of Directors for its information at the meeting thereof held next after the proceedings shall have been taken. ARTICLE VI Contracts, Loans, Checks and Deposits Section 1. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 2. Loans. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 3. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 4. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select. ARTICLE VII Certificates for Shares and Their Transfer Section 1. Certificates for Shares. Certificates representing shares of the corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer or by the Secretary or an Assistant Secretary and sealed with the corporate seal or a facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent, or registered by a registrar, other than the corporation itself or one of its employees. All certificates for shares shall be consecutively numbered or otherwise identified. Each certificate representing shares shall state upon its face (a) that the corporation is organized under the laws of the state of Colorado, (b) the name of the person to whom issued, (c) the number and class of the shares and the designation of the series, if any, that the certificate represents, (d) the par value, if any, of each share represented by the certificate and (e) any restrictions imposed by the corporation upon the transfer of the shares represented by the certificate. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. Section 2. Transfer of Shares. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, or with its transfer agent, if any, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. ARTICLE VIII Fiscal Year The fiscal year of the corporation shall begin on the first day of February and end on the thirty-first day of January in each year. ARTICLE IX Dividends The Board of Directors may, from time to time, declare and the corporation may pay dividends on its outstanding shares in the manner, and upon the terms and conditions provided by law and its Articles of Incorporation. ARTICLE X Corporate Seal The Board of Directors shall adopt a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words, "Corporate Seal." ARTICLE XI Waiver of Notice Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these Bylaws or under the provisions of the Articles of Incorporation or under the provisions of the Colorado Business Corporation Act, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XII Amendments These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board of Directors at any regular or special meeting of the Board of Directors. ARTICLE XIII Indemnification of Directors, Officers, and Others Section 1. Definitions. As used in this Article XIII, (a) "Corporation" includes any domestic or foreign predecessor entity of the corporation in a merger, consolidation or other transaction in which the predecessor's existence ceased upon consummation of the transaction; (b) "Director or officer" means an individual who is or was a director or officer of the corporation and an individual who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee or agent of any other foreign or domestic corporation or of any partnership, joint venture, trust, other enterprise or employee benefit plan. A director or officer shall be considered to be serving an employee benefit plan at the corporation's request if his duties to the corporation also impose duties on or otherwise involve services by him to the plan or to participants in or beneficiaries of the plan. "Director or officer" includes, unless the context otherwise requires, the estate or personal representative of a director or officer; (c) "Expenses" includes attorney fees; (d) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan) or reasonable expense incurred with respect to a proceeding; (e) "Official capacity," when used with respect to a director or officer, means the office of director or officer in the corporation. "Official capacity" does not include service for any other foreign or domestic corporation or for any partnership, joint venture, trust, other enterprise, or employee benefit plan; (f) "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding; (g) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal. Section 2. Mandatory Indemnification. (a) Except as provided in paragraph (d) of this Section 2, the corporation shall indemnify against liability incurred in any proceeding an individual made a party to the proceeding because he is or was a director or officer if: (i) He conducted himself in good faith; (ii) He reasonably believed: (A) In the case of conduct in his official capacity with the corporation, that his conduct was in the corporation's best interests; or (B) In all other cases, that his conduct was at least not opposed to the corporation's best interests; and (iii)In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. (b) A director's or officer's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirements of Section 2(a)(ii)(B). A director's or officer's conduct with respect to an employee benefit plan for a purpose that he did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirements of Section 2(a)(i). (c) The termination of any proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, is not of itself determinative that the individual did not meet the standard of conduct set forth in paragraph (a) of this Section 2. (d) The corporation may not indemnify a director or officer under this Section 2 either: (i) In connection with a proceeding by or in the right of the corporation in which the director or officer was adjudged liable to the corporation; or (ii) In connection with any proceeding charging improper personal benefit to the director or officer, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. (e) Indemnification permitted under this Section 2 in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. Section 3. Authorization. (a) The corporation shall not indemnify a director or officer under Section 2 unless authorized in the specific case after a determination has been made that indemnification of the director or officer is permissible in the circumstances because he has met the standard of conduct set forth in paragraph (a) of Section 2. (b) The determination required to be made by paragraph (a) of this Section 3 shall be made: (i) By the Board of Directors by a majority vote of a quorum, which quorum shall consist of directors not parties to the proceeding; or (ii) If a quorum cannot be obtained, by a majority vote of a committee of the Board designated by the Board, which committee shall consist of two or more directors not parties to the proceeding; except that directors who are parties to the proceeding may participate in the designation of directors for the committee. (c) If the quorum cannot be obtained or the committee cannot be established under paragraph (b) of this Section 3, or even if a quorum is obtained or a committee designated if such quorum or committee so directs, the determination required to be made by paragraph (a) of this Section 3 shall be made: (i) By independent legal counsel selected by a vote of the Board of Directors or the committee in the manner specified in subparagraph (i) or (ii) of paragraph (b) of this Section 3 or, if a quorum of the full Board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full Board; or (ii) By the shareholders. (d) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is required; except that, if the determination that indemnification is required is made by independent legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by the body that selected said counsel. Section 4. Advance Payment. (a) The corporation shall pay for or reimburse the reasonable expenses incurred by a director or officer who is a party to a proceeding in advance of the final disposition of the proceeding if: (i) The director or officer furnishes the corporation a written affirmation of his good-faith belief that he has met the standard of conduct described in Section 2(a); (ii) The director or officer furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is determined that he did not meet such standard of conduct; and (iii) A determination is made that the facts then known to those making the determination would not preclude indemnification under this Section 4. (b) The undertaking required by subparagraph (ii) of paragraph (a) of this Section 4 shall be an unlimited general obligation of the director or officer, but need not be secured and may be accepted without reference to financial ability to make repayment. (c) Determinations and authorizations of payments under this Section 4 shall be made in the manner specified in Section 3. Section 5. Insurance. The corporation may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, fiduciary or agent of the corporation or who, while a director, officer, employee, fiduciary or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any other foreign or domestic corporation or of any partnership, joint venture, trust, other enterprise or employee benefit plan against any liability asserted against or incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article XIII. Any such insurance may be procured from any insurance company designated by the Board of Directors of the corporation, whether such insurance company is formed under the laws of Colorado or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has equity or any other interest, through stock ownership or otherwise. Section 6. Notice to Shareholders. Any indemnification of or advance of expenses to a director or officer in accordance with this section, if arising out of a proceeding by or on behalf of the corporation, shall be reported in writing to the shareholders with or before the notice of the next shareholders's meeting. EX-27 3
5 1000 YEAR JAN-31-1996 JAN-31-1996 91 0 904251 29393 0 0 5396 0 889684 0 369100 0 0 0 192659 889684 0 124017 0 88931 0 12752 42157 35086 12600 0 0 0 0 22486 0 0
EX-12 4 Exhibit 12.1 NORDSTROM CREDIT, INC. Computation of Ratio of Earnings Available for Fixed Charges to Fixed Charges (Dollars in thousands)
Year ended January 31, 1996 1995 1994 1993 1992 - ---------------------- ------- ------- ------- ------- ------- Earnings before income taxes $35,086 $32,045 $32,372 $29,321 $24,023 Fixed charges (gross interest expense) 42,245 31,187 29,600 33,841 35,037 ------- ------- ------- ------- ------- Earnings available for fixed charges $77,331 $63,232 $61,972 $63,162 $59,060 ======= ======= ======= ======= ======= Ratio of earnings available for fixed charges to fixed charges 1.83 2.03 2.09 1.87 1.69 ======= ======= ======= ======= =======
EX-23 5 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Amendment No. 1 to Registration Statement No. 33-55905 of Nordstrom Credit, Inc. on Form S-3 of our report dated March 8, 1996, appearing in this Annual Report on Form 10-K of Nordstrom Credit, Inc. for the year ended January 31, 1996. DELOITTE & TOUCHE LLP Seattle, Washington March 29, 1996 -----END PRIVACY-ENHANCED MESSAGE-----