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, 1994 / / 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.) 1501 Fifth Avenue, Seattle, Washington 98101 ______________________________________________________ (Address of principal executive office) (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 16 On March 22, 1994, 82,080,065 shares of common stock were outstanding, and the aggregate market value of those shares (based upon the closing price as reported by the NASDAQ) held by non-affiliates was approximately $2.1 billion. Documents Incorporated by Reference: Portions of Nordstrom, Inc. 1993 Annual Report to Shareholders (Parts I and II) Portions of Proxy Statement for 1994 Annual Meeting of Shareholders (Part III) 2 of 16 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. Today, the Company operates 53 large specialty stores and four smaller specialty stores in Washington, Oregon, California, Utah, Alaska, Virginia, New Jersey, Illinois, Maryland and Minnesota, selling a wide selection of apparel, shoes and accessories for women, men and children. The Company also operates eighteen clearance stores under the name "Nordstrom Rack" which serve as outlets for clearance merchandise from the Company's large specialty stores. The Racks also purchase merchandise directly from manufacturers. The Racks are located in Washington, Oregon, California, Utah, Virginia, Maryland, Pennsylvania and Illinois. The Company also operates a men's specialty store in New York and leased shoe departments in 11 department stores in Hawaii. The Company commenced operations of its Direct Sales division with the mailing of the first catalog at the end of 1993. Over the next twelve to eighteen months, the Company will be involved in tests of Interactive Television Shopping. The Company regularly employs on a full or part-time basis an average of approximately 33,000 employees. Due to the seasonal nature of the Company's business, the number increased to approximately 40,000 employees in December. 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 and boutiques. 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 1993 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Message to the Shareholders Management Discussion and Analysis Note 13 in Notes to Consolidated Financial Statements 3 of 16 Executive Officers of the Registrant - - ------------------------------------ All of the above people that have not been officers for the past five years have been full-time employees of the Company during that period. The officers are re-elected annually by the Board of Directors following each year's Annual Meeting. Each officer is elected for a term of one year or until a successor is elected and qualifies. 4 of 16
Officer Name Age Title Since Family Relationship - - -------------------- --- ------------------ ------- -------------------- Jammie Baugh 40 Executive Vice 1990 None President Gail Cottle 42 Executive Vice 1985 None President Joseph V. Demarte 42 Vice President 1990 None John A. Goesling 48 Executive Vice 1980 None President and Treasurer Jack Irving 49 Executive Vice 1980 None President Raymond A. Johnson 52 Co-President 1976 None John A. McMillan 62 Co-Chairman of the 1969 Cousin by marriage of Board of Directors Bruce A., James F., and John N. Nordstrom Blake Nordstrom 33 Vice President 1991 Son of Bruce A. Nordstrom Bruce A. Nordstrom 60 Co-Chairman of the 1966 Cousin of James F. Board of Directors and John N. Nordstrom James A. Nordstrom 32 Vice President 1991 Son of John N. Nordstrom James F. Nordstrom 54 Co-Chairman of the 1969 Brother of John N. Board of Directors Nordstrom John N. Nordstrom 56 Co-Chairman of the 1966 Brother of James F. Board of Directors Nordstrom Robert T. Nunn 54 Executive Vice 1983 None President Cynthia C. Paur 43 Executive Vice 1983 None President John Walgamott 48 President of 1991 None Nordstrom Credit, Inc. and Nordstrom National Credit Bank John Whitacre 41 Co-President 1989 None Item 2. Properties. - - -------------------- The following table summarizes at January 31, 1994 the number of stores owned or operated by the Company and the percentage of total store area represented by each listed category: The Company also operates eight merchandise distribution centers, five of which are owned and three of which are leased. The Company leases its principal offices in Seattle, Washington, and owns an office building in the Denver, Colorado metropolitan area which serves as the principal offices of Nordstrom Credit, Inc. and Nordstrom National Credit Bank. The Company operates 25 full-line stores, six clearance stores and two distribution centers in California. Because of its high cost, the Company does not carry earthquake insurance. Certain other information required under this item is included in the following section of the Company's 1993 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report: Retail Store Facilities Item 3. Legal Proceedings. - - -------------------------- The Company is not involved in any material pending legal proceedings, other than routine litigation in the ordinary course of business. Item 4. Submission of Matters to a Vote of Security Holders - - ------------------------------------------------------------ None 5 of 16
Number of % of total store stores square footage --------- ---------------- Owned Stores 20 29% Leased Stores 35 29 Owned on leased land 18 39 Partly owned & partly leased 1 3 --------- ---------------- 74 100% ========= ================ PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. - - --------------------------------------------------------------------- The Company's Common Stock, without par value, is traded in the over-the- counter market and is quoted daily by the NASDAQ. The approximate number of holders of Common Stock as of March 22, 1994 was 71,500. Certain other information required under this Item with respect to stock prices and dividends is included in the following sections of the Company's 1993 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Financial Highlights - Stock Trading Consolidated Statements of Shareholders' Equity Note 9 in Notes to Consolidated Financial Statements Note 14 in Notes to Consolidated Financial Statements Item 6. Selected Financial Data. - - --------------------------------- The information required under this item is included in the following section of the Company's 1993 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report: 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 1993 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report: Management Discussion and Analysis Item 8. Financial Statements and Supplementary Data. - - ----------------------------------------------------- The information required under this item is included in the following sections of the Company's 1993 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 6 of 16 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. - - ------------------------------------------------------------ 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 1994 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(a) 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 1994 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, 1994 Compensation and Stock Option Committee Report on Executive Compensation Stock Price Performance Compensation of Directors Compensation Committee Interlocks and Insider Participation 1993 Non-Employee Director Stock Incentive Plan (Effectiveness of the Plan is subject to approval of the shareholders at the 1994 Annual Meeting of Shareholders.) 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 1994 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: Principal Shareholders 7 of 16 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 1994 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 Transactions with Management 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 ----------------------------- 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 1993 Annual Report to Shareholders as incorporated by reference herein from Exhibit 13.1 of this report. 8 of 16
Page ---- Independent Auditors' Consent and Report on Schedules 12 V - Property, Buildings and Equipment 13 VI - Accumulated Depreciation and Amortization of Property, Buildings and Equipment 14 VIII - Valuation and Qualifying Accounts 15 IX - Short-term Borrowings 16 (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, 1990, Exhibit A. (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, 1992, Exhibit 3.2. (4.1) The Indenture between Nordstrom Credit, Inc. (a wholly-owned subsidiary of the Registrant) and First Interstate Bank of Washington, N.A. 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 the Nordstrom Credit, Inc. Annual Report on Form 10-K (SEC File No. 0-12994) for the year ended January 31, 1991, Exhibit 4.2, respectively. Securities authorized under each of any other long-term debt instruments of the Company or its subsidiaries do not exceed 10% of the consolidated total assets of the Company and its subsidiaries. The Company will furnish a copy of any such long- term debt instrument or agreement to the Commission upon request. (10.1) Operating Agreement dated August 30, 1991 between Nordstrom Credit, Inc. and Nordstrom National Credit Bank is hereby incorporated by reference from the Nordstrom Credit, Inc. Quarterly Report on Form 10-Q, as amended (SEC File No. 0-12994) for the quarter ended July 31, 1991, Exhibit 10.1. (10.2) The 1987 Nordstrom Stock Option Plan is hereby incorporated by reference from the Registrants' Proxy Statement for its 1987 Annual Meeting of Shareholders. (10.3) The Nordstrom Supplemental Retirement Plan is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1992, Exhibit 10.3. (10.4) The 1993 Non-Employee Director Stock Incentive Plan is filed herein as an Exhibit. (Effectiveness of the Plan is subject to approval of the shareholders at the 1994 Annual Meeting of Shareholders.) (13.1) The Company's 1993 Annual Report to Shareholders is filed herein as an Exhibit. (21.1) List of the Registrant's Subsidiaries is filed herein as an Exhibit. (23.1) Independent Auditors' consent is on page 12 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 1993 Annual Report to Shareholders. 9 of 16 (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. 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/ John A. Goesling Date March 31, 1994 by __________________________________________ ____________________ John A. Goesling Executive Vice President and Treasurer (Principal Accounting and Financial Officer) 10 of 16 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 Executive Officers: Principal Accounting and Financial Officer: /s/ Raymond A. Johnson /s/ John A. Goesling _______________________________ ________________________________ Raymond A. Johnson John A. Goesling Co-President Executive Vice President and Treasurer /s/ John Whitacre _______________________________ John Whitacre Co-President Directors: /s/ D. Wayne Gittinger /s/ James F. Nordstrom _______________________________ ________________________________ D. Wayne Gittinger James F. Nordstrom Director Co-Chairman /s/ John F. Harrigan /s/ John N. Nordstrom _______________________________ ________________________________ John F. Harrigan John N. Nordstrom Director Co-Chairman /s/ Charles A. Lynch /s/ Alfred E. Osborne Jr. _______________________________ ________________________________ Charles A. Lynch Alfred E. Osborne Jr. Director Director /s/ Ann D. McLaughlin /s/ William D. Ruckelshaus _______________________________ ________________________________ Ann D. McLaughlin William D. Ruckelshaus Director Director /s/ John A. McMillan /s/ Malcolm T. Stamper _______________________________ ________________________________ John A. McMillan Malcolm T. Stamper Co-Chairman Director /s/ Bruce A. Nordstrom /s/ Elizabeth Crownhart Vaughan _______________________________ ________________________________ Bruce A. Nordstrom Elizabeth Crownhart Vaughan Co-Chairman Director Date March 31, 1994 ___________________________ 11 of 16 INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES Shareholders and Board of Directors Nordstrom, Inc. We consent to the incorporation by reference in Registration Statements Nos. 33-18321 and 2-81695 of Nordstrom, Inc. on Form S-8 of our reports dated March 11, 1994 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, 1994. We have audited the consolidated financial statements of Nordstrom, Inc. and subsidiaries as of January 31, 1994 and 1993, and for each of the three years in the period ended January 31, 1994, and have issued our report thereon dated March 11, 1994; such financial statements and report are included in your 1993 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of Nordstrom, Inc. and subsidiaries, listed in Item 14(a)2. These financial statement schedules are 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 schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. Deloitte & Touche March 31, 1994 Seattle, Washington 12 of 16 NORDSTROM, INC. AND SUBSIDIARIES SCHEDULE V - PROPERTY, BUILDINGS AND EQUIPMENT (Dollars in thousands)
Column A Column B Column C Column D Column E Column F Balance at Balance beginning Additions Retire- Reclassi- at end of Description of period at cost ments fications period - - ----------- ---------- --------- -------- --------- ---------- Year ended January 31, 1994: Land and land improvements $ 40,806 $ 400 $ - $ 604 $ 41,810 Property leased under capitalized leases 27,421 - - (4,500) 22,921 Buildings 370,878 8,242 25 2,894 381,989 Leasehold improvements 456,087 15,206 - - 471,293 Store fixtures and equipment 472,759 46,966 9,938 1,002 510,789 Construction in progress 17,123 53,697 - - 70,820 ---------- -------- ------- ------- ---------- $1,385,074 $124,511 $ 9,963 $ - $1,499,622 ========== ======== ======= ======= ==========
Year ended January 31, 1993: Land and land improvements $ 39,454 $ 1,665 $ 313 $ - $ 40,806 Property leased under capitalized leases 29,826 - 2,405 - 27,421 Buildings 327,026 44,033 181 - 370,878 Leasehold improvements 452,359 4,035 307 - 456,087 Store fixtures and equipment 424,509 58,352 10,102 - 472,759 Construction in progress 54,046 (36,923) - - 17,123 ---------- -------- ------- ------- ---------- $1,327,220 $ 71,162 $13,308 $ - $1,385,074 ========== ======== ======= ======= ========== 13 of 16
Year ended January 31, 1992: Land and land improvements $ 38,772 $ 1,296 $ 614 $ - $ 39,454 Property leased under capitalized leases 29,826 - - - 29,826 Buildings 302,672 24,360 6 - 327,026 Leasehold improvements 370,835 81,524 - - 452,359 Store fixtures and equipment 347,799 80,262 3,552 - 424,509 Construction in progress 94,965 (40,919) - - 54,046 ---------- -------- ------- ------- ---------- $1,184,869 $146,523 $ 4,172 $ - $1,327,220 ========== ======== ======= ======= ========== NORDSTROM, INC. AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, BUILDINGS AND EQUIPMENT (Dollars in thousands)
Column A Column B Column C Column D Column E Column F Additions Balance at charged to Balance beginning costs and Retire- Reclassi- at end of Description of period expenses ments fications period - - ----------- ---------- ---------- ------- --------- --------- Year ended January 31, 1994: Land improvements $ 6,024 $ 1,059 $ (2) $ (133) $ 7,218 Property leased under capitalized leases 14,055 830 - 2,193 12,692 Buildings 119,502 20,148 32 (1,058) 140,676 Leasehold improvements 103,316 21,973 19 - 125,270 Store fixtures and equipment 318,035 58,933 9,800 (1,002) 368,170 -------- -------- ------- -------- -------- $560,932 $102,943 $ 9,849 $ - $654,026 ======== ======== ======= ======== ========
Year ended January 31, 1993: Land improvements $ 5,103 $ 959 $ 38 $ - $ 6,024 Property leased under capitalized leases 15,066 903 1,914 - 14,055 Buildings 100,081 19,569 148 - 119,502 Leasehold improvements 83,378 20,241 303 - 103,316 Store fixtures and equipment 267,188 60,572 9,725 - 318,035 -------- -------- ------- -------- -------- $470,816 $102,244 $12,128 $ - $560,932 ======== ======== ======= ======== ======== 14 of 16
Year ended January 31, 1992: Land improvements $ 4,177 $ 926 $ - $ - $ 5,103 Property leased under capitalized leases 14,086 980 - - 15,066 Buildings 81,933 18,153 5 - 100,081 Leasehold improvements 65,026 18,352 - - 83,378 Store fixtures and equipment 213,456 57,137 3,405 - 267,188 -------- -------- ------ -------- -------- $378,678 $ 95,548 $3,410 $ - $470,816 ======== ======== ====== ======== ======== NORDSTROM, INC. AND SUBSIDIARIES SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS (Dollars in thousands) 15 of 16
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, 1994 $23,969 $25,713 $26,537 $23,145 January 31, 1993 $24,192 $29,469 $29,692 $23,969 January 31, 1992 $19,635 $33,235 $28,678 $24,192 NORDSTROM INC. AND SUBSIDIARIES SCHEDULE IX - SHORT-TERM BORROWINGS (Dollars in thousands) 16 of 16
Column A Column B Column C Column D Column E Column F -------- -------- -------- -------- -------- -------- Weighted Maximum Average average Category of Weighted amount amount interest aggregate Balance average outstanding outstanding rate short-term at end of interest during the during the during borrowings period rate period period period - - ---------- --------- -------- ----------- ----------- -------- (A) (B) (C) January 31, 1994 Notes payable $25,000 3.0% $ 55,000 $ 26,479 3.1% to banks Commercial paper 15,337 3.4 92,023 50,300 3.2 January 31, 1993 Notes payable $25,000 3.0% $125,000 $ 66,139 3.8% to banks Commercial paper 13,319 3.5 136,038 75,840 3.7 January 31, 1992 Notes payable $50,000 4.1% $110,000 $ 55,710 5.7% to banks Commercial paper 84,735 4.1 184,500 128,112 5.7 (A) The notes payable to banks have maturities of up to six months or on demand. Notes payable to holders of commercial paper generally have maturities ranging from one day to two months. (B) Average amount outstanding during the period is computed by dividing the total of daily outstanding principal balances by the number of days in the period. (C) Weighted average interest rate during the period is computed by dividing the actual short-term interest expense by the average short-term borrowings outstanding. NORDSTROM INC. AND SUBSIDIARIES Exhibit Index
Exhibit Method of Filing - - ------- ---------------- 3.1 Articles of Incorporation Incorporated by reference from Form 10-K for the year ended January 31, 1990. 3.2 By-laws Incorporated by reference from Form 10-K for the year ended January 31, 1992. 4.1 Indenture between Nordstrom, Credit, Incorporated by reference Inc. and First Interstate Bank of from Registration Washington, the First Supplement, No. 33-3765, Registration the Second Supplement and the Third No. 33-19743, Registration Supplement No. 33-29193 and the Nordstrom Credit, Inc. Annual Report on Form 10-K for the year ended January 31, 1991. 10.1 Operating Agreement between Nordstrom, Incorporated by reference Credit, Inc. and Nordstrom National from the Nordstrom Credit, Credit Bank Inc. Quarterly Report on Form 10-Q, as amended for the quarter ended July 31, 1991. 10.2 1987 Stock Option Plan Incorporated by reference from the Proxy Statement for the 1987 Annual Meeting of Shareholders. 10.3 Supplemental Retirement Plan Incorporated by reference from Form 10-K for the year ended January 31, 1992. 10.4 1993 Non-Employee Director Stock Incentive Plan Filed herewith electronically 13.1 1993 Annual Report to Shareholders Filed herewith electronically 21.1 Subsidiaries of the Registrant Filed herewith electronically 23.1 Independent Auditors' consent Filed herewith electronically
EXHIBIT 10.4 NORDSTROM, INC. AND SUBSIDIARIES 1993 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN 1. Purpose. The purposes of the 1993 Non-Employee Director Stock Incentive Plan (the "Plan") are to attract and retain well-qualified persons for service as directors of Nordstrom, Inc. (the "Company"), to provide directors through the payment of an incentive payable in shares of the Company's Common Stock, without par value ("Common Stock"), with the opportunity to increase their proprietary interest in the Company, and thereby to increase their personal interest in the Company's continued success. 2. Administration. Responsibility and authority to administer and interpret the provisions of the Plan shall be conferred upon the Compensation and Stock Option Committee ("Committee"). The Committee may employ attorneys, consultants, accountants or other persons and the Committee, the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All usual and reasonable expenses of the Committee shall be paid by the Company. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon all recipients who have received awards, the Company and other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretations taken or made in good faith with respect to the Plan or awards made hereunder, and all members of the Committee shall be fully indemnified and protected by the Company in respect of any action, determination or interpretation. 3. Eligibility. All directors of the Company who are neither full-time employees of the Company nor officers of the Company shall be participants in the Plan. 4. Awards. Awards under the Plan shall consist of two parts, a stock award (the "Stock Award") and a cash award (the "Tax Gross Up") intended to offset the federal income tax liability attributable to the Stock Award. The Stock Award and the Tax Gross Up shall be payable in stock and cash as provided hereunder. Within thirty (30) days after each annual meeting of shareholders of the Company during the term hereof, the Company shall cause to be issued to each person who is an eligible director immediately following the annual meeting that number of full shares of Common Stock (rounded to the nearest whole share) determined by dividing $10,000 by the mean of the closing bid and ask prices of a share of Common Stock as of the date of the annual meeting, or, if no sale of Common Stock has been recorded on that date, then on the next preceding date on which a sale was made (the "Fair Market Value"). Concurrently with the issuance of each Stock Award, the Company shall deliver to each eligible director a cash payment of $4,000 as the Tax Gross Up. No payment will be required from the director upon the issuance or delivery of a Stock Award or Tax Gross Up, except that any amount necessary to satisfy applicable federal, state or local tax requirements shall be withheld or paid promptly upon notification of the amount due and prior to or concurrently with issuance of a certificate representing a Stock Award; provided that notwithstanding anything contained herein to the contrary, the Committee may accept stock received in connection with the Stock Award being taxed or otherwise previously acquired in satisfaction of any withholding requirements. 5. Terms and Conditions. Up to 25,000 shares of Common Stock may be issued from authorized shares of the Company pursuant to the Plan. Shares of Common Stock issued pursuant to the Plan shall be from authorized but unissued shares. To the extent the shares are not registered under the Securities Act of 1933, as amended (the "Act"), they may not be sold, assigned, transferred or otherwise disposed of in the absence of an effective registration statement covering the shares, or an available exemption under the Act. A director may not sell or otherwise transfer shares issued as a Stock Award under the Plan for a period of six (6) months from the date of the award. The Committee shall appropriately adjust the number of shares for which awards may be granted pursuant to the Plan in the event of reorganization, recapitalization, stock split, reverse stock split, stock dividend, exchange or combination of shares, merger, consolidation, rights offering, or any change in capitalization of the Company. 6. Amendment or Discontinuance. The Board of Directors of the Company may, at any time, amend, rescind or terminate the Plan, as it shall deem advisable; provided, however, that (i) no change may be made in any Stock Award or Tax Gross Up previously made under the Plan which would impair the recipients' rights without their consent; (ii) no amendment to the Plan may be made without approval of the Company's shareholders if the effect of the amendment would be to: (a) materially increase the number of shares reserved for issuance hereunder or benefits accruing to participants under the Plan, (b) materially change the requirements for eligibility under Section 3 hereof, or (c) materially modify the method for determining the number of shares awarded under Section 4 hereof, except that any such increase or modification that results from adjustments authorized by the last paragraph of Section 5 shall not require such approval; and (iii) no amendment may be made to the Plan within six months of a prior amendment, except as required for compliance with the Internal Revenue Code of 1986 or the rules thereunder. 7. Effective Date and Term of Plan. The Plan shall become effective as of May 17, 1993 and shall remain in effect until December 31, 2002. Stock Awards granted prior to termination of the Plan, shall, notwithstanding termination of the Plan, continue to be effective and shall be governed by the Plan. 8. Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the state of Washington pertaining to contracts made and to be performed wholly within such jurisdiction.
NORDSTROM, INC. AND SUBSIDIARIES 1 About the Company Nordstrom has grown from its origins as a small shoe store, to become one of the nation's leading fashion specialty retailers, offering a wide variety of fine quality apparel, shoes and accessories for women, men and children. Now in its 93rd year, Nordstrom operates 52 large specialty stores in Washington, Oregon, California, Utah, Alaska, Virginia, Maryland, New Jersey, Illinois and Minnesota, plus four smaller specialty stores, 17 clearance and off-price stores, a men's wear boutique in New York City, and leased shoe departments in 11 department stores in Hawaii. Currently led by the third generation of the Nordstrom family, the Company remains committed to its founding principles of quality, value, selection and service. 2 NORDSTROM, INC. AND SUBSIDIARIES Table of Contents 3 Financial Highlights 4 Message to the Shareholders 5 Management Discussion & Analysis 9 Consolidated Statements of Earnings 10 Consolidated Balance Sheets 11 Consolidated Statements of Shareholders' Equity 12 Consolidated Statements of Cash Flows 13 Notes to Consolidated Financial Statements 22 Report of Management 23 Independent Auditors' Report 24 Ten-Year Statistical Summary 26 Officers, Directors and Committees 30 Retail Store Facilities NORDSTROM, INC. AND SUBSIDIARIES 3 Financial Highlights Stock Trading
Dollars in thousands except per share amounts Fiscal Year 1993 1992 % Change - - ------------------------------------------------------------------------------ Net sales $3,589,938 $3,421,979 +4.9 Earnings before income taxes 230,918 222,119 +4.0 Net earnings 140,418 136,619 +2.8 Net earnings per share 1.71 1.67 +2.4 Cash dividends paid per share .34 .32 +6.3 Nordstrom, Inc. common stock is traded over-the-counter and quoted daily in leading financial publications. NASDAQ Symbol -- Nobe. Net Sales The vertical bar graph shows the growth in net sales for the past ten years. Dollars are in millions. In fiscal year 1993, net sales were $3,590; 1992- $3,422; 1991-$3,180; 1990-$2,894; 1989-$2,671; 1988-$2,328; 1987-$1,920; 1986- $1,630; 1985-$1,302 and 1984-$959. Net Earnings The vertical bar graph compares net earnings for the past ten years. Beginning with the most recent fiscal year on the left, net earnings (dollars in millions) were as follows: 1993-$140.4; 1992-$136.6; 1991-$135.8; 1990- $115.8; 1989-$114.9; 1988-$123.3; 1987-$92.7; 1986-$72.9; 1985-$50.1 and 1984- $40.7.
Fiscal Year 1993 Fiscal Year 1992 - - -------------------------------------------------------------------------- High Low High Low 1st Quarter 43 1/2 27 3/4 42 3/4 30 2nd Quarter 32 1/4 25 1/4 35 1/4 25 1/2 3rd Quarter 35 3/4 26 1/4 35 26 1/2 4th Quarter 36 1/2 31 40 1/2 30 5/8 4 NORDSTROM, INC. AND SUBSIDIARIES Message to the Shareholders Our sales totaled $3.59 billion in 1993 compared with $3.42 billion in 1992. Earnings for 1993 were $140.4 million compared with $136.6 million in 1992. Our full-line Nordstrom stores previously scheduled to open in 1993 were postponed by developers until 1994 or 1995 due to financing or permit delays, but we did open a Nordstrom Factory Direct store in Philadelphia on August 5 and a Facconable store on 54th Street and 5th Avenue in New York City on October 1 of 1993. We are now back on a more normal expansion schedule for 1994 through 1996. Annapolis Mall, Annapolis, Maryland; Santa Anita Mall, Arcadia, California; Old Orchard Mall, Skokie, Illinois; and a move to an expanded Washington Square store in Southwest Portland, Oregon are all Nordstrom full-line stores opening this year. The first phase of our Bellevue, Washington expansion opens this fall as well. Store openings for 1995 include Woodfield Mall, Schaumburg, Illinois; Westchester Mall, White Plains, New York; Short Hills Mall, Millburn, New Jersey; Circle Centre, Indianapolis, Indiana; and the final phase of the Bellevue Square expansion. In 1996 we expect to open new stores in Dallas, Denver, Philadelphia and Detroit. We also welcomed our Direct Sales Division's first catalog on January 27. Telephone answering service is performed by the Nordstrom Direct Sales team in Seattle, and merchandise is shipped from our Memphis, Tennessee warehouse via Federal Express. Early results are very encouraging for this first catalog. Additional catalog mailings will follow about every other month. As we previously announced, our Direct Sales Division will be involved in tests of Interactive Television Shopping over the next 12 to 18 months. We believe our Company is moving toward a better 1994 for several reasons: 1) Our 4th quarter was the strongest of the past year, and outperformed a good 4th quarter in 1992. 2) Our business in California appears to be recovering well in spite of the earthquake, fires, floods and droughts that have recently affected business in that region. 3) Our sales in our newer markets are most encouraging, with Chicago, Washington, D.C. and New Jersey all doing well. 4) The national economy is improved and our customers seem to be feeling better about the future. As we move through the '90s, you can be sure your Company's policies will continue to focus on improved customer service, high quality merchandise, wide selection and great value, to better serve more customers than ever. John A. McMillan Bruce A. Nordstrom James F. Nordstrom John N. Nordstrom NORDSTROM, INC. AND SUBSIDIARIES 5 Management Discussion and Analysis The following discussion and analysis gives a more detailed review of the past three years, as well as additional information on future commitments and trends. This discussion and analysis should be read in conjunction with the basic consolidated financial statements and the Ten-Year Statistical Summary. Sales Sales have increased to record levels in each of the past three years. As shown below, the sales increases are primarily attributable to additional stores. During the last three years, there has been very modest growth in overall comparable stores' sales. Consumers have been more cautionary in their spending patterns in nearly all regions of the Company's operations during this period of time. Many consumers have reacted to various economic and political issues by slowing or reducing purchases. This trend has been more noticeable in California where, after many years of sustained high growth in sales, comparable sales have decreased at some stores. In addition, sales of women's apparel in 1993 were disappointing. While other categories of merchandise showed improving sales trends, women's apparel sales decreased slightly in comparable stores because fashion trends were not widely accepted. This phenomenon was experienced by many other retailers as well. It generally takes new stores several years to reach the high sales productivity of the Company's average store, due to the established customer base and traffic patterns of the Company's more mature stores. As a result, sales growth from new stores during the last three years has increased at a somewhat lower rate than the increase in average store square footage each year. While management believes that some portion of the increase in merchandise sales is due to inflation, it is difficult to measure because of changes in merchandise styles and selections. The change in the retail prices of apparel, shoes and accessories as measured by the Bureau of Labor Statistics on an overall basis was 3% for 1991, 1% for 1992 and 1% for 1993. Management believes that these statistics are the best available measure of the effect of inflation on the Company's selling prices. Percentage of 1993 Sales by Merchandise Category The pie chart depicts each merchandise category and the percent to total sales. Clockwise: Shoes - 20%; Men's Apparel and Furnishings - 16%; Children's Apparel and Accessories - 4%; Other - 2%; Women's Apparel - 38% and Women's Accessories - 20%. The caption below the graph reads, "Sales by major merchandise category have changed only slightly over the past several years."
Fiscal Year 1993 1992 1991 - - -------------------------------------------------------------------------- Additional sales in comparable stores (open at least fourteen months) 2.7% 1.4% 1.4% Sales in new stores 2.2% 6.2% 8.5% ---- ---- ---- Total percentage increase 4.9% 7.6% 9.9% ==== ==== ==== 6 NORDSTROM, INC. AND SUBSIDIARIES Management Discussion and Analysis Costs and Expenses As a result of increased sales, total costs and expenses have increased in each year. As a percentage of sales, total costs and expenses were 93.2% in 1991, 93.5% in 1992 and 93.6% in 1993. These percentages are higher than the 1980s because of the minimal rate of growth in comparable store sales. Unless otherwise indicated, the changes discussed below are stated as a percentage of sales as shown on page 9. Cost of sales and related buying and occupancy costs fluctuate primarily because of changes in the merchandise gross margin. During 1991 and 1992, the merchandise gross margin improved because inventory levels were well controlled and more emphasis was placed on merchandise price points. In 1993, the merchandise gross margin decreased because of the softness of demand for women's apparel as noted earlier. Buying costs increased in 1992 and 1993, as the Company spent more to develop its own merchandise brands and to develop and implement a new inventory management system. These costs are expected to further increase in 1994. Selling, general and administrative expenses increased in 1991 and 1992 as sales growth slowed. Salaries, wages, workers' compensation claims and medical plan benefits increased in comparable stores at a faster rate than sales. In addition, bad debts increased in 1991 as a result of the effects of the recession, with a high proportion of the increase occurring in California. In 1992, management implemented programs to control these expenses, and as a result, the rate of growth of these expenses has slowed. In 1993, selling, general and administrative expenses decreased primarily because of a reduction in bad debts. Interest expense decreased in 1991 because the Company refinanced long-term debt during the prior two years at lower interest rates, and short-term interest rates declined. In 1992 and 1993, interest expense decreased because of lower short-term interest rates and reductions in debt outstanding. Other income in the fourth quarter of 1992 was reduced by a charge of $6.6 million ($.05 per share after income taxes) for plaintiffs' legal fees in connection with the settlement of a class action lawsuit. The Company established a reserve in 1989 for potential wage claims alleged in that same lawsuit. The Company has now paid nearly all resulting claims, and accordingly has adjusted the reserve to reflect actual claims paid. This resulted in an increase in other income in the fourth quarter of 1993 of $4.5 million ($.03 per share after income taxes). Also, in the fourth quarter of 1993, other income was reduced by $5 million ($.04 per share after income taxes) for estimated expenses and property losses resulting from the earthquake in Southern California. The Company does not carry earthquake insurance because of its high cost. Income Taxes The provision for income taxes increased in 1991 and 1992 as a percentage of earnings before income taxes because of a reduction in deferred tax credits. In 1993, the provision increased because of the increase in the Federal income tax rate. Net Earnings Earnings growth over the past several years has been difficult to achieve because of the effect of the recession on consumers' purchasing power and the promotional environment in the retail industry. NORDSTROM, INC. AND SUBSIDIARIES 7 Management Discussion and Analysis Liquidity and Capital Resources During the past three years, cash provided by operating activities has exceeded cash used in investing activities as shown on page 12. The Company has used this excess cash flow to reduce total debt outstanding. This situation will be reversed starting in 1994 as the Company increases spending on new store construction. The Company's operating working capital (net working capital less short-term investments plus notes payable and the current portion of long-term debt) has fluctuated as shown below: The Company believes that operating working capital is a more appropriate measure of the Company's on-going working capital requirements than net working capital because it eliminates the effect of changes in the levels of short-term investments and borrowings. These levels can vary each year depending on financing activities. In 1991, operating working capital increased at a faster rate than sales. The primary cause for this increase relates to the increase in prepaid expenses arising from changes in the timing of deductions for income tax purposes. Operating working capital increased at a slower rate in 1992 and decreased in 1993 because of reduced customer accounts receivable. Credit sales on the Company's credit card have decreased, reflecting more cautious use of credit by consumers in general and increased competition from third-party cards. The Company intends to issue its own VISA card in 1994 to counteract this trend. Investing and Operating Cash Flows The vertical bar graph compares cash provided by operating activities and cash used in investing activities for each year, for the past ten years. Dollars are in millions.
Fiscal year 1993 1992 1991 - - ----------------------------------------------------------------------------- Operating working capital (in thousands) $745,040 $765,893 $758,581 Percentage change from prior year (2.7%) 1.0% 11.8% -------- -------- -------- Net sales/average operating working capital 4.8 4.5 4.4 ======== ======== ========
Investing Operating Year activities activities - - ---- ---------- ---------- 1993 $132.7 $262.1 1992 $ 71.9 $235.6 1991 $147.2 $154.0 1990 $200.7 $148.1 1989 $168.7 $122.2 1988 $153.4 $ 46.0 1987 $128.3 $ 87.7 1986 $ 69.8 $115.0 1985 $120.9 $ (3.5) 1984 $134.5 $ 26.7 8 NORDSTROM, INC. AND SUBSIDIARIES Management Discussion and Analysis Liquidity and Capital Resources (continued) The Company has spent $347 million during the last three years to add new stores and facilities and to improve existing stores and facilities. Over 1.6 million square feet of selling space has been added during this time period, representing an increase of 21%. Most of the new stores have been constructed by the Company on land that it owns or leases under long-term agreements, thus providing a strong basis for future operations. The rate of growth in square footage will increase in 1994 as compared to 1993. The Company plans to spend over $750 million on capital projects during the next three years, with over $100 million allocated to the refurbishment of existing stores. Although the Company has made commitments for stores to be opening in 1994 and beyond, it is possible that some stores may not be opened as scheduled because of environmental and land use regulations and the difficulties encountered by shopping center developers in securing financing. The anticipated growth of the Company's operations will require some external capital in the next three years. Most of these external capital requirements will be funded with additional long- and short-term debt issued by the Company's captive finance subsidiary. The Company's capital base has expanded over the last three years. At the end of 1993, the Company's capital totaled $1,645 million. Because the Company has experienced strong positive cash flows, outstanding debt has decreased in total and as a percentage of total capital. The percentage of debt to total capital is lower than it has been in over 10 years. Management believes that the expansion of the Company's operations over the next several years will not significantly increase its debt to capital percentage. Management also believes that the Company's current financial strength provides the resources necessary to maintain its existing stores and the flexibility to take advantage of new store opportunities. Square Footage by Market Area at end of 1993 The pie chart shows the percent of total square feet in each region and also gives the number of square for that region. Clockwise: Northern California, 20.7%, 1,922,000; Washington, 13.5%, 1,251,000; Capital, 11.5%, 1,067,000; Oregon, 8.0%, 742,000; Northeast, 7.8%, 722,000; Midwest, 5.3%, 489,000; Utah, 3.8%, 357,000; Place Two and Clearance, 1.1%, 99,000; Alaska, 1.0%, 97,000 and Southern California, 27.3%, 2,536,000. NORDSTROM, INC. AND SUBSIDIARIES 9 Consolidated Statements of Earnings The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Dollars in thousands except per share amounts % of % of % of Year ended January 31, 1994 Sales 1993 Sales 1992 Sales - - ---------------------------------------------------------------------------------------------------- Net sales $3,589,938 100.0 $3,421,979 100.0 $3,179,820 100.0 ---------- ----- ---------- ----- ---------- ----- Costs and expenses: Cost of sales and related buying and occupancy 2,469,304 68.8 2,339,107 68.3 2,169,437 68.2 Selling, general and administrative 940,579 26.2 902,083 26.4 831,505 26.2 Interest, net 37,646 1.1 44,810 1.3 49,106 1.5 Service charge income and other, net (88,509) (2.5) (86,140) (2.5) (87,443) (2.7) ---------- ----- ---------- ----- ---------- ----- Total costs and expenses 3,359,020 93.6 3,199,860 93.5 2,962,605 93.2 ---------- ----- ---------- ----- ---------- ----- Earnings before income taxes 230,918 6.4 222,119 6.5 217,215 6.8 Income taxes 90,500 2.5 85,500 2.5 81,400 2.5 ---------- ----- ---------- ----- ---------- ----- Net earnings $ 140,418 3.9 $ 136,619 4.0 $ 135,815 4.3 ========== ===== ========== ===== ========== ===== Net earnings per share $ 1.71 $ 1.67 $ 1.66 ========== ========== ========== Cash dividends paid per share $ .34 $ .32 $ .31 ========== ========== ========== 10 NORDSTROM, INC. AND SUBSIDIARIES Consolidated Balance Sheets The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Dollars in thousands January 31, 1994 1993 - - ----------------------------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 91,222 $ 29,136 Accounts receivable, net 586,441 603,198 Merchandise inventories 585,602 536,739 Prepaid income taxes and other 51,649 50,771 ---------- ---------- Total current assets 1,314,914 1,219,844 Property, buildings and equipment, net 845,596 824,142 Other assets 16,971 9,184 ---------- ---------- Total assets $2,177,481 $2,053,170 ========== ========== Liabilities and Shareholders' Equity Current liabilities: Notes payable $ 40,337 $ 38,319 Accounts payable 264,055 220,176 Accrued salaries, wages and taxes 156,947 158,028 Accrued expenses 35,994 31,141 Accrued income taxes 27,988 22,216 Current portion of long-term debt 102,164 41,316 ---------- ---------- Total current liabilities 627,485 511,196 Long-term debt 336,410 440,629 Deferred income taxes 47,082 49,314 Shareholders' equity 1,166,504 1,052,031 ---------- ---------- Total liabilities and shareholders' equity $2,177,481 $2,053,170 ========== ========== NORDSTROM, INC. AND SUBSIDIARIES 11 Consolidated Statements of Shareholders' Equity The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Dollars in thousands except per share amounts Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------------------------------------ Common Stock Authorized 250,000,000 shares; issued and outstanding 82,059,128, 81,974,797 and 81,844,227 shares Balance at beginning of year $ 155,439 $ 153,055 $ 150,699 Issuance of common stock 1,935 2,384 2,356 ---------- ---------- ---------- Balance at end of year 157,374 155,439 153,055 ---------- -------- ---------- Retained Earnings Balance at beginning of year 896,592 786,176 675,711 Net earnings 140,418 136,619 135,815 Cash dividends paid ($.34, $.32 and $.31 per share) (27,880) (26,203) (25,350) ---------- ---------- ---------- Balance at end of year 1,009,130 896,592 786,176 ---------- ---------- ---------- Total shareholders' equity $1,166,504 $1,052,031 $ 939,231 ========== ========== ========== 12 NORDSTROM, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Dollars in thousands Year ended January 31, 1994 1993 1992 - - ----------------------------------------------------------------------------------------------------------- Operating Activities Net earnings $140,418 $136,619 $135,815 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 103,466 102,763 96,034 Change in: Accounts receivable, net 16,757 5,029 (32,719) Merchandise inventories (48,863) (30,107) (58,288) Prepaid income taxes and other (878) (2,643) (6,263) Accounts payable 43,879 3,744 12,166 Accrued salaries, wages and taxes (1,081) 12,236 17,095 Accrued expenses 4,853 (600) (2,927) Income tax liabilities 3,540 8,586 (6,926) -------- -------- -------- Net cash provided by operating activities 262,091 235,627 153,987 -------- -------- -------- Investing Activities Additions to property, buildings and equipment, net (124,401) (69,982) (145,761) Other, net (8,306) (1,870) (1,393) -------- -------- -------- Net cash used in investing activities (132,707) (71,852) (147,154) -------- -------- -------- Financing Activities Increase (decrease) in notes payable 2,018 (96,416) (14,771) Principal payments on long-term debt (43,371) (29,055) (85,647) Proceeds from issuance of common stock 1,935 2,384 2,356 Cash dividends paid (27,880) (26,203) (25,350) Proceeds from issuance of long-term debt, net -- - 106,568 -------- -------- -------- Net cash used in financing activities (67,298) (149,290) (16,844) -------- -------- -------- Net increase (decrease) in cash and cash equivalents 62,086 14,485 (10,011) Cash and cash equivalents at beginning of year 29,136 14,651 24,662 -------- -------- -------- Cash and cash equivalents at end of year $ 91,222 $ 29,136 $ 14,651 ======== ======== ======== NORDSTROM, INC. AND SUBSIDIARIES 13 Notes to Consolidated Financial Statements Dollars in thousands except per share amounts Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The Consolidated Financial Statements include the accounts of Nordstrom, Inc. and its subsidiaries. All significant intercompany transactions and accounts are eliminated in consolidation. Merchandise Inventories: Merchandise inventories are stated at the lower of cost (first-in, first-out basis) or market, using the retail method. Property, Buildings and Equipment: Straight-line and accelerated methods are applied in the calculation of depreciation and amortization. Accelerated methods are generally applied for income tax purposes. Lives used for calculating depreciation and amortization rates for the principal asset classifications are as follows: buildings, 10 to 50 years; store fixtures and equipment, three to 15 years; leasehold improvements and property leased under capitalized leases, life of lease or applicable shorter period. Store Preopening Costs: Store opening and preopening costs are charged to expense when incurred. Capitalization of Interest: The interest carrying costs of facilities being constructed are capitalized during their construction period based on the Company's weighted average borrowing rate. Income Taxes: The Company adopted Statement of Financial Accounting Standards No. 109 in 1993. This statement supersedes Accounting Principles Board Opinion No. 11, which the Company previously followed. Implementation of this standard had no significant impact on the Company's results of operations. Earnings per Share: Earnings per share are computed on the basis of the weighted average number of common shares outstanding during the year. Average shares outstanding were 82,003,407, 81,892,829 and 81,779,997 in 1993, 1992 and 1991. Cash Equivalents: 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. Customer Accounts Receivable: In accordance with trade practices, installments maturing in more than one year or deferred payment accounts receivable are included in current assets. Cash Management: The Company's cash management system provides for the reimbursement of all major bank disbursement accounts on a daily basis. Accounts payable at January 31, 1994 and 1993 include $15,817 and $2,643 of checks drawn in excess of cash balances not yet presented for payment. 14 NORDSTROM, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Note 1 continued) Post-Employment Benefits: The Company provides post-retirement medical benefits for a limited group of employees. In 1993, the Company adopted Statement of Financial Accounting Standards No. 106, which requires accrual of these costs over the period of employment. These costs were previously expensed when paid. In addition, the Company provides continuation of medical benefits, workers compensation and disability benefits to certain former or inactive employees. In 1993, the Company adopted Statement of Financial Accounting Standards No. 112, which requires full accrual of these costs by the date the employees' services terminate or suspend. These costs were previously expensed on an incurred-claim basis. Implementation of these standards had no material impact on the Company's results of operations. Reclassifications: Certain reclassifications have been made for consistent presentation. Note 2: EMPLOYEE BENEFITS The Company provides a profit sharing plan for employees. The plan is non-contributory except for employee contributions made underSection 401(k) of the Internal Revenue Code. Under this provision, the Company provides matching contributions up to a stipulated percentage of employee contributions. The plan is fully funded by the Company, and the contribution is established each year by the Board of Directors. The Company contribution was $35,500, $34,000 and $31,500 for 1993, 1992 and 1991. Note 3: SUPPLEMENTARY STATEMENTS OF EARNINGS INFORMATION The following amounts are included in the Company's expenses:
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Payroll taxes $65,752 $63,083 $55,872 Other taxes (excluding income taxes) 18,549 16,010 16,880 Advertising costs 60,112 58,424 55,320 NORDSTROM, INC. AND SUBSIDIARIES 15 Notes to Consolidated Financial Statements Note 4: INTEREST EXPENSE The components of interest expense are as follows: Note 5: INCOME TAXES Income taxes consist of the following:
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Nordstrom, Inc. Short-term debt $ 46 $ 799 $ 2,756 Long-term debt 12,830 14,084 18,880 Nordstrom Credit, Inc. Short-term debt 2,361 4,474 7,753 Long-term debt 25,543 28,906 27,105 ------- ------- ------- Total interest incurred 40,780 48,263 56,494 Less: Interest income (1,624) (1,161) (1,680) Capitalized interest (1,510) (2,292) (5,708) ------- ------- ------- Interest, net $37,646 $44,810 $49,106 ======= ======= =======
Year ended January 31, 1994 1993 1992 ----------------------------------------------------------------------- Current income taxes: Federal $77,231 $71,181 $70,561 State and local 16,149 14,931 17,034 ------- ------- ------- Total current income taxes 93,380 86,112 87,595 ------- ------- ------- Deferred income taxes: Current (648) (3,588) (7,135) Non-current (2,232) 2,976 940 ------- ------- ------- Total deferred income taxes (2,880) (612) (6,195) ------- ------- ------- Total income taxes $90,500 $85,500 $81,400 ======= ======= ======= NORDSTROM, INC. AND SUBSIDIARIES 16 Notes to Consolidated Financial Statements (Note 5 continued) A reconciliation of the statutory Federal income tax rate with the effective tax rate is as follows: Note 6: ACCOUNTS RECEIVABLE The components of accounts receivable are as follows:
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Statutory rate 35.00% 34.00% 34.00% State and local income taxes, net of Federal income taxes 4.41 4.38 4.35 Other, net (0.21) 0.11 (0.88) ------- ------- ------- Effective tax rate 39.20% 38.49% 37.47% ======= ======= ======= Deferred income taxes result from temporary differences in the timing of recognition of revenue and expenses for tax and financial statement reporting as follows: Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Excess tax basis depreciation $2,557 $2,342 $1,687 Accrued expenses (2,850) (3,039) (5,808) Other (2,587) 85 (2,074) ------- ------- ------- Total deferred income taxes ($2,880) ($ 612) ($6,195) ======= ======= ======= Credit risk with respect to accounts receivable is concentrated in the geographic regions in which the Company operates stores. At January 31, 1994 and 1993, approximately 50% of the Company's receivables were concentrated in California. Concentration of the remaining receivables is considered to be limited due to their geographical dispersion. Bad debt expense totaled $25,713, $29,469 and $33,235 for 1993, 1992 and 1991.
January 31, 1994 1993 - - ------------------------------------------------------------------------ Customers $588,296 $608,348 Other 21,290 18,819 Allowance for doubtful accounts (23,145) (23,969) -------- -------- Accounts receivable, net $586,441 $603,198 ======== ======== NORDSTROM, INC. AND SUBSIDIARIES 17 Notes to Consolidated Financial Statements Note 7: PROPERTY, BUILDINGS AND EQUIPMENT Property, buildings and equipment consist of the following (at cost): At January 31, 1994 the Company had contractual commitments of approximately $76,209 for construction of new stores. Note 8: NOTES PAYABLE A summary of notes payable is as follows:
January 31, 1994 1993 - - ------------------------------------------------------------------------ Land and land improvements $ 41,810 $ 40,806 Buildings 404,910 398,299 Leasehold improvements 471,293 456,087 Store fixtures and equipment 510,789 472,759 ---------- ---------- 1,428,802 1,367,951 Less accumulated depreciation and amortization (654,026) (560,932) ---------- ---------- 774,776 807,019 Construction in progress 70,820 17,123 ---------- ---------- Property, buildings and equipment, net $ 845,596 $ 824,142 ========== ========== The carrying amount of notes payable approximates fair value because of the short maturity of these instruments. At January 31, 1994 Nordstrom Credit, Inc. had unsecured lines of credit with commercial banks totaling $150,000 which are available as liquidity support for short-term debt. Nordstrom Credit, Inc. pays commitment fees for the lines in lieu of compensating balance requirements.
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Average daily short-term borrowings $ 76,779 $141,979 $183,822 Maximum amount outstanding 117,023 186,038 253,971 Weighted average interest rate during the year 3.1% 3.7% 5.7% NORDSTROM, INC. AND SUBSIDIARIES 18 Notes to Consolidated Financial Statements Note 9: LONG-TERM DEBT A summary of long-term debt is as follows: The senior note agreements contain restrictive covenants which, among other things, restrict dividends to shareholders to a formula amount. At January 31, 1994, approximately $569,993 of retained earnings was not restricted. Aggregate principal payments on long-term debt are as follows: 1994-$102,164; 1995-$75,967; 1996-$74,210; 1997-$5,053; and 1998-$105,183. The fair value of long-term debt at January 31, 1994, estimated using quoted market prices of the same or similar issues with the same remaining maturity, was approximately $478,000.
January 31, 1994 1993 - - ------------------------------------------------------------------------ Senior notes, 8.875%-9%, due 1994-1998 $150,000 $150,000 Medium-term notes, Nordstrom Credit, Inc., 8.05%-9.6%, due 1994-2001 210,000 250,000 Sinking fund debentures, Nordstrom Credit, Inc., 9.375%, due 2016, payable in annual installments of $3,750 beginning in 1997 55,600 55,600 Other 22,974 26,345 -------- -------- Total long-term debt 438,574 481,945 Less current portion (102,164) (41,316) -------- -------- Total due beyond one year $336,410 $440,629 ======== ======== NORDSTROM, INC. AND SUBSIDIARIES 19 Notes to Consolidated Financial Statements Note 10: LEASES The Company leases land, buildings and equipment under non-cancelable lease agreements with expiration dates ranging from 1994 to 2080. Certain of the leases include renewal provisions at the Company's option. Most of the leases provide for additional rentals based upon specific percentages of sales and require the Company to pay for certain other costs. Future minimum lease payments as of January 31, 1994 are as follows: 1994- $29,356; 1995-$26,218; 1996-$25,616; 1997-$24,721; 1998-$23,369; and thereafter -$218,582. The following is a schedule of rent expense: Note 11: STOCK OPTION PLAN The Company provides a stock option plan for certain key employees. Options are issued at market value on the date of grant and become exercisable over a five-year period. The number of shares reserved for future stock options grants is 996,831. A summary of stock option activity follows:
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Minimum rent: Store locations $14,899 $14,719 $12,023 Offices, warehouses and equipment 19,390 17,660 16,913 Contingent rent: Store location percentage rent 13,964 13,398 12,287 Common area costs, taxes and other 8,692 8,105 8,124 ------- ------- ------- Total rent expense $56,945 $53,882 $49,347 ======= ======= =======
Range of prices Shares per share - - ------------------------------------------------------------------------ Outstanding, February 1, 1993 1,444,357 $ 7.44-$43.25 Granted 450,950 27.75- 36.00 Exercised 81,410 7.44- 32.50 Cancelled 81,433 22.00- 43.25 --------- --------------- Outstanding, January 31, 1994 1,732,464 $ 7.44-$43.25 ========= =============== Exercisable, January 31, 1994 796,717 $ 7.44-$43.25 ========= =============== NORDSTROM, INC. AND SUBSIDIARIES 20 Notes to Consolidated Financial Statements Note 12: SUPPLEMENTARY CASH FLOW INFORMATION Supplementary cash flow information includes the following: Note 13: CREDIT CARD AND FINANCING SUBSIDIARIES Nordstrom National Credit Bank (the Bank), a wholly-owned subsidiary, issues credit cards for use in Company stores. Nordstrom Credit, Inc., a wholly- owned subsidiary, finances customer receivables generated by the Bank. Condensed combined financial information of the subsidiaries is as follows:
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Cash paid during the year for: Interest (net of capitalized interest) $41,122 $47,994 $50,905 Income taxes 86,485 79,740 94,766
Year ended January 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Service charge income $91,026 $92,553 $88,626 Other income 5,086 4,121 1,821 ------- ------- ------- Total revenue $96,112 $96,674 $90,447 ======= ======= ======= Net earnings $22,209 $19,699 $15,545 ======= ======= =======
January 31, 1994 1993 - - ------------------------------------------------------------------------ Assets: Cash and cash equivalents $ 21,972 $ 18,444 Accounts receivable, net 564,605 583,186 Other assets 8,527 9,552 -------- -------- Total assets $595,104 $611,182 ======== ======== Liabilities and investment of Nordstrom, Inc.: Notes Payable $152,837 $150,819 Accounts payable and accrued liabilities 20,902 21,207 Long-term debt 265,600 305,600 Investment of Nordstrom, Inc. 155,765 133,556 -------- -------- Total liabilities and investment of Nordstrom, Inc. $595,104 $611,182 ======== ======== 21 NORDSTROM, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Note 14: SELECTED QUARTERLY DATA (UNAUDITED)
- - -------------------------------------------------------------------------------------------------------- Year ended January 31, 1994 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total - - -------------------------------------------------------------------------------------------------------- Net Sales $695,559 $1,017,582 $769,373 $1,107,424 $3,589,938 Gross Profit 212,971 306,565 245,057 356,041 1,120,634 Earnings before income taxes 18,395 70,151 42,056 100,316 230,918 Net earnings 11,295 42,651 25,456 61,016 140,418 Earnings per share .14 .52 .31 .74 1.71 Dividends per share .085 .085 .085 .085 .34 Year ended January 31, 1993 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total - - -------------------------------------------------------------------------------------------------------- Net Sales $663,809 $951,616 $737,301 $1,069,253 $3,421,979 Gross Profit 211,920 299,584 239,103 332,265 1,082,872 Earnings before income taxes 35,282 67,953 37,729 81,155 222,119 Net earnings 21,582 41,653 23,429 49,955 136,619 Earnings per share .26 .51 .29 .61 1.67 Dividends per share .08 .08 .08 .08 .32 22 NORDSTROM, INC. AND SUBSIDIARIES Management and Independent Auditors' Reports REPORT OF MANAGEMENT The accompanying consolidated financial statements, including the notes thereto, and the other financial information presented in this Annual Report have been prepared by management. The financial statements have been prepared in accordance with generally accepted accounting principles and include amounts that are based upon our best estimates and judgments. Management is responsible for the consolidated financial statements, as well as the other financial information in this Annual Report. The Company maintains an effective system of internal accounting control. We believe that this system provides reasonable assurance that transactions are executed in accordance with management authorization, and that they are appropriately recorded, in order to permit preparation of financial statements in conformity with generally accepted accounting principles and to adequately safeguard, verify and maintain accountability of assets. The concept of reasonable assurance is based on the recognition that the cost of a system of internal control should not exceed the benefits derived. The consolidated financial statements and related notes have been audited by Deloitte & Touche, independent certified public accountants. The accompanying auditors' report expresses an independent professional opinion on the fairness of presentation of management's financial statements. The Audit Committee of the Board of Directors is composed of the outside directors, and is responsible for recommending the independent certified public accounting firm to be retained for the coming year, subject to shareholder approval. The Audit Committee meets periodically with the independent auditors, as well as with management and internal auditors, to review accounting, auditing, internal accounting controls and financial reporting matters. The independent auditors and the internal auditors also meet privately with the Audit Committee. John A. Goesling Executive Vice President and Chief Financial Officer NORDSTROM, INC. AND SUBSIDIARIES 23 INDEPENDENT AUDITORS' REPORT We have audited the accompanying consolidated balance sheets of Nordstrom, Inc. and subsidiaries as of January 31, 1994 and 1993, and the related consolidated statements of earnings, shareholders' equity and cash flows for each of the three years in the period ended January 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements 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 consolidated financial statements present fairly, in all material respects, the financial position of Nordstrom, Inc. and subsidiaries as of January 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended January 31, 1994, in conformity with generally accepted accounting principles. Deloitte & Touche Seattle, Washington; March 11, 1994 24 NORDSTROM, INC. AND SUBSIDIARIES Ten-Year Statistical Summary Dollars in thousands except square footage and per share amounts
Year ended January 31, 1994 1993 1992 1991 1990 - - ------------------------------------------------------------------------------------------------------------ Financial Position Customer accounts receivable, net $ 565,151 $ 584,379 $ 585,490 $ 558,573 $ 519,656 Merchandise inventories 585,602 536,739 506,632 448,344 419,976 Current assets 1,314,914 1,219,844 1,177,638 1,090,379 1,011,148 Current liabilities 627,485 511,196 553,903 551,835 489,888 Working capital 687,429 708,648 623,735 538,544 521,260 Working capital ratio 2.10 2.39 2.13 1.98 2.06 Property, buildings and equipment, net 845,596 824,142 856,404 806,191 691,937 Long-term debt 438,574 481,945 511,000 489,172 468,412 Debt/capital ratio 29.11 33.09 40.74 43.59 43.78 Shareholders' equity 1,166,504 1,052,031 939,231 826,410 733,250 Shares outstanding 82,059,128 81,974,797 81,844,227 81,737,910 81,584,710 Book value per share 14.22 12.83 11.48 10.11 8.99 Total assets 2,177,481 2,053,170 2,041,875 1,902,589 1,707,420 Operations Net sales 3,589,938 3,421,979 3,179,820 2,893,904 2,671,114 Costs and expenses: Cost of sales and related buying and occupancy 2,469,304 2,339,107 2,169,437 2,000,250 1,829,383 Selling, general and administrative 940,579 902,083 831,505 747,770 669,159 Interest, net 37,646 44,810 49,106 52,228 49,121 Service charge income and other, net (88,509) (86,140) (87,443) (84,660) (55,958) Total costs and expenses 3,359,020 3,199,860 2,962,605 2,715,588 2,491,705 Earnings before income taxes 230,918 222,119 217,215 178,316 179,409 Income taxes 90,500 85,500 81,400 62,500 64,500 Net earnings 140,418 136,619 135,815 115,816 114,909 Earnings per share 1.71 1.67 1.66 1.42 1.41 Dividends per share .34 .32 .31 .30 .28 Net earnings as a percent of net sales 3.91% 3.99% 4.27% 4.00% 4.30% Return on average shareholders' equity 12.66% 13.72% 15.38% 14.85% 16.74% Sales per square foot for Company- operated stores 383 381 388 391 398 Stores and Facilities Company-operated stores 74 72 68 63 59 Total square footage 9,282,000 9,224,000 8,590,000 7,655,000 6,898,000 25 NORDSTROM INC. AND SUBSIDIARIES Ten-Year Statistical Summary (continued)
Dollars in thousands except square footage and per share amounts - - ----------------------------------------------------------------------------------------------------------- Year ended January 31, 1989 1988 1987 1986 1985 - - ----------------------------------------------------------------------------------------------------------- Financial Position Customer accounts receivable, net $ 465,929 $ 391,387 $ 344,045 $ 296,030 $ 214,831 Merchandise inventories 403,795 312,696 257,334 226,017 162,361 Current assets 913,986 730,182 645,326 546,756 402,898 Current liabilities 448,165 394,699 324,697 339,503 239,331 Working capital 465,821 335,483 320,629 207,253 163,567 Working capital ratio 2.04 1.85 1.99 1.61 1.68 Property, buildings and equipment, net 594,038 502,661 424,228 397,380 313,818 Long-term debt 389,216 260,343 271,054 276,419 199,387 Debt/capital ratio 43.12 39.57 41.57 56.41 50.12 Shareholders' equity 639,941 533,209 451,196 314,119 271,709 Shares outstanding 81,465,027 81,371,106 80,981,722 74,504,392 74,382,408 Book value per share 7.86 6.55 5.57 4.22 3.65 Total assets 1,511,703 1,234,267 1,071,124 945,880 717,557 Operations Net sales 2,327,946 1,920,231 1,629,918 1,301,857 958,678 Costs and expenses: Cost of sales and related buying and occupancy 1,563,832 1,300,720 1,095,584 893,874 648,270 Selling, general and administrative 582,973 477,488 408,664 326,758 243,845 Interest, net 39,977 32,952 34,910 30,482 20,682 Service charge income and other, net (57,268) (53,662) (49,479) (36,636) (26,630) Total costs and expenses 2,129,514 1,757,498 1,489,679 1,214,478 886,167 Earnings before income taxes 198,432 162,733 140,239 87,379 72,511 Income taxes 75,100 70,000 67,300 37,300 31,800 Net earnings 123,332 92,733 72,939 50,079 40,711 Earnings per share 1.51 1.13 .91 .65 .54 Dividends per share .22 .18 .13 .11 .10 Net earnings as a percent of net sales 5.30% 4.83% 4.48% 3.85% 4.25% Return on average shareholders' equity 21.03% 18.84% 19.06% 17.10% 15.98% Sales per square foot for Company- operated stores 380 349 322 293 267 Stores and Facilities Company-operated stores 58 56 53 52 44 Total square footage 6,374,000 5,527,000 5,098,000 4,727,000 3,924,000 26 NORDSTROM INC. AND SUBSIDIARIES Officers, Directors and Committees
Officers Jammie Baugh 40 Executive Vice President Southern California General Manager Gail A. Cottle 42 Executive Vice President Product Development Dale C. Crichton 45 Vice President Cosmetics and Gift Gallery Merchandise Manager Joseph V. Demarte 42 Vice President Personnel Annette S. Dresser 33 Vice President Individualist and Petite Focus Merchandise Manager Charles L. Dudley 43 Vice President Human Resources John A. Goesling 48 Executive Vice President and Treasurer Finance Tamela J. Hickel 33 Vice President Oregon General Manager Darrel J. Hume 46 Vice President Men's Sportswear Merchandise Manager Jack F. Irving 49 Executive Vice President Men's Wear Merchandise Manager Raymond A. Johnson 52 Co-President Barbara J. Kanaya 47 Vice President Accessories Merchandise Manager Cody K. Kondo 38 Vice President Northeast General Manager David P. Lindsey 44 Vice President Store Planning David L. Mackie 45 Vice President Legal and Real Estate Robert J. Middlemas 37 Vice President Midwest General Manager Blake W. Nordstrom 33 Vice President Washington and Alaska General Manager James A. Nordstrom 32 Vice President Northern California General Manager NORDSTROM, INC. AND SUBSIDIARIES 27
Robert T. Nunn 54 Executive Vice President Shoe Merchandise Manager Cynthia C. Paur 43 Executive Vice President Better Apparel Merchandise Manger Karen E. Purpur 50 Secretary John J. Whitacre 41 Co-President Martha S. Wikstrom 37 Vice President Capital General Manager 28 NORDSTROM, INC. AND SUBSIDIARIES
Directors D. Wayne Gittinger 61 Director Partner, Lane Powell Spears Lubersky, Seattle, WA John F. Harrigan 68 Director Retired Chairman, Union Bank, Los Angeles, CA Charles A. Lynch 66 Director Chairman, Market Value Partners Company, Menlo Park, CA Ann D. McLaughlin 52 Director President, Federal City Council, Washington, D.C. and Vice Chairman, The Aspen Institute, Aspen, CO John A. McMillan 62 Co-Chairman of the Board of Directors Bruce A. Nordstrom 60 Co-Chairman of the Board of Directors James F. Nordstrom 54 Co-Chairman of the Board of Directors John N. Nordstrom 56 Co-Chairman of the Board of Directors Alfred E. Osborne, Jr. 49 Director Director, Entrepreneurial Studies Center and Associate Professor of Business Economics, The John E. Anderson Graduate School of Management, University of California, Los Angeles, CA William D. Ruckelshaus 61 Director Chairman of the Board and Chief Executive Officer, Browning-Ferris Industries, Inc., Houston, TX Malcolm T. Stamper 68 Director Publisher, Chairman and Chief Executive Officer, Storytellers, Ink., Seattle, WA Elizabeth Crownhart Vaughan 65 Director President, Salar Enterprises, Portland, OR NORDSTROM, INC. AND SUBSIDIARIES 29 Committees EXECUTIVE John A. McMillan Bruce A. Nordstrom James F. Nordstrom John N. Nordstrom AUDIT John F. Harrigan Charles A. Lynch Ann D. McLaughlin Alfred E. Osborne, Jr. William D. Ruckelshaus, Chair Elizabeth Crownhart Vaughan COMPENSATION AND STOCK OPTION D. Wayne Gittinger John F. Harrigan Ann D. McLaughlin Alfred E. Osborne, Jr. William D. Ruckelshaus Elizabeth Crownhart Vaughan, Chair CONTRIBUTIONS Anne E. Gittinger, Secretary-ex officio Bruce A. Nordstrom James F. Nordstrom, Chair John N. Nordstrom William D. Ruckelshaus Malcolm T. Stamper FINANCE John A. Goesling--ex officio John F. Harrigan, Chair Charles A. Lynch Alfred E. Osborne, Jr. Malcolm T. Stamper ORGANIZATION AND NOMINATING D. Wayne Gittinger Charles A. Lynch Malcolm T. Stamper, Chair Elizabeth Crownhart Vaughan PROFIT SHARING AND BENEFITS Joseph V. Demarte-ex officio D. Wayne Gittinger Raymond A. Johnson-ex officio Bruce A. Nordstrom, Chair John N. Nordstrom NORDSTROM, INC. AND SUBSIDIARIES 30 Retail Store Facilities The following table sets forth certain information with respect to each of the stores operated by the Company. The Company also operates leased shoe departments in 11 department stores in Hawaii. In addition, the Company operates eight distribution centers and leases other space for administrative functions.
Present Present Year opened total store Year opened total store Location or acquired area/sq. ft. Location or acquired area/sq. ft. - - ------------------------------------------------ ------------------------------------------------- WASHINGTON GROUP NORTHERN CALIFORNIA GROUP Downtown Seattle(1) 1963 245,000 Hillsdale Shopping Center 1982 149,000 Northgate Mall 1965 122,000 Broadway Plaza 1984 193,000 Tacoma Mall 1966 132,000 Stanford Shopping Center 1984 187,000 Bellevue Square 1967 184,000 The Village at Corte Madera 1985 116,000 Southcenter Mall 1968 170,000 Oakridge Mall 1985 150,000 Yakima 1972 44,000 Valley Fair 1987 165,000 Spokane 1974 121,000 280 Metro Center Rack 1987 31,000 Alderwood Mall 1979 127,000 Stonestown Galleria 1988 174,000 Pavilion Rack 1985 39,000 Downtown San Francisco 1988 350,000 Alderwood Rack 1985 25,000 Arden Fair 1989 190,000 Downtown Seattle Rack 1987 42,000 Stoneridge Mall 1990 173,000 Marina Square Rack 1990 44,000 OREGON GROUP Lloyd Center 1963 150,000 ALASKA GROUP Downtown Portland 1966 174,000 Anchorage 1975 97,000 Washington Square 1974 108,000 Vancouver Mall 1977 71,000 UTAH GROUP Salem Centre 1980 71,000 Crossroads Plaza 1980 140,000 Clackamas Town Center 1981 121,000 Fashion Place Mall 1981 110,000 Clackamas Rack 1983 28,000 Ogden City Mall 1982 76,000 Downtown Portland Rack 1986 19,000 Sugarhouse Center Rack 1991 31,000 SOUTHERN CALIFORNIA GROUP CAPITAL GROUP South Coast Plaza 1978 235,000 Tysons Corner Center 1988 239,000 Brea Mall 1979 195,000 The Fashion Centre at Los Cerritos Center 1981 122,000 Pentagon City 1989 241,000 Fashion Valley Mall 1981 156,000 Potomac Mills Rack 1990 46,000 Glendale Galleria 1983 147,000 Montgomery Mall 1991 225,000 Santa Ana Rack 1983 22,000 City Place Rack 1992 37,000 Topanga Plaza 1984 154,000 Towson Town Center 1992 205,000 University Towne Centre 1984 130,000 Towson Rack 1992 31,000 Woodland Hills Rack 1984 48,000 Franklin Mills Factory Direct 1993 43,000 The Galleria at South Bay 1985 161,000 Westside Pavilion 1985 150,000 NORTHEAST GROUP Horton Plaza 1985 151,000 Garden State Plaza 1990 272,000 Mission Valley Rack 1985 27,000 Menlo Park Mall 1991 266,000 Montclair Plaza 1986 133,000 Freehold Raceway Mall 1992 174,000 North County Fair 1986 156,000 Facconable 1993 10,000 MainPlace Mall 1987 169,000 Chino Town Square Rack 1987 30,000 MIDWEST GROUP Paseo Nuevo 1990 186,000 Oakbrook Center 1991 249,000 The Galleria at Tyler 1991 164,000 Mall of America 1992 240,000 PLACE TWO AND CLEARANCE STORES Washington and Arizona 99,000 (1) Excludes approximately 23,000 square feet of corporate and administrative offices. (2) Includes four Place Two stores and one clearance store. Shareholder Information Independent Auditors Deloitte & Touche Counsel Lane Powell Spears Lubersky Transfer Agent and Registrar First Interstate Bank of California Telephone (800) 522-6645 General Offices 1501 Fifth Avenue, Seattle, WA 98101-1603 Telephone (206) 628-2111 Annual Meeting May 17, 1994 at 9:00 a.m. Central Time Oakbrook Hills Hotel and Resort Oak Brook, Illinois Form 10-K The Company's Annual Report to the Securities and Exchange Commission on Form 10-K for the year ended January 31, 1994 will be provided to shareholders upon written request to: Investors Relations, Nordstrom, Inc., P.O. Box 2737, Seattle, WA 98111 or by calling (206) 233-6690. NORDSTROM, INC. AND SUBSIDIARIES Appendix
Graph Page - - ------------------------------------------------ ---- Net Sales 3 Net Earnings 3 Percentage of 1993 Sales by Merchandise Category 5 Investing and Operating Cash Flows 7 Square Footage by Market Area at end of 1993 8
EXHIBIT 22.1 NORDSTROM, INC. AND SUBSIDIARIES SUBSIDIARIES OF THE REGISTRANT Name of Subsidiary State of Incorporation - - ------------------------------ ---------------------- Nordstrom Credit, Inc. Colorado Nordstrom National Credit Bank Colorado