UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
(Amendment No. 1)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2004
[ ] 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 001-15059
Nordstrom, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Washington 91-0515058
_______________________________ ___________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1617 Sixth Avenue, Seattle, Washington 98101
____________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 628-2111
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 whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). YES X NO
_____ _____
Common stock outstanding as of August 19, 2004: 141,445,080 shares of
common stock.
1 of 24
Explanatory Note
----------------
This Amendment to the Quarterly Report on Form 10-Q for Nordstrom, Inc. (the
"Company") for the fiscal quarter ended July 31, 2004, is being filed to
correct two errors in our previously issued financial statements: the
statements of cash flows presentation of property incentive cash inflows and
the balance sheet classification of leased assets that were previously treated
as sale-leaseback transactions. In addition, we have reclassified balances in
our previously issued financial statements to conform to our current
presentation. The principal reclassification item relates to the balance sheet
and cash flow presentation of our investments in Auction Rate Securities. See
Note 9 in our Notes to Condensed Consolidated Financial Statements for a
discussion of these corrections and reclassifications, and a reconciliation of
amounts previously reported to those shown herein. We have also revised our
discussion in Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations. Information not affected by the
corrections and reclassifications as described in Note 9 remains unchanged and
reflects the disclosures made at the time of the original filing of the Form
10-Q on September 9, 2004. Our previously reported net earnings, earnings per
share and shareholders' equity are not impacted by these corrections and
reclassifications.
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NORDSTROM, INC. AND SUBSIDIARIES
--------------------------------
INDEX
-----
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Earnings
Quarter and Year to Date ended July 31, 2004
and August 2, 2003 4
Condensed Consolidated Balance Sheets July 31, 2004,
January 31, 2004 and August 2, 2003 (restated) 5
Condensed Consolidated Statements of Cash Flows
Year to Date ended July 31, 2004 and
August 2, 2003 (restated) 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
Item 4. Controls and Procedures 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 21
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 6. Exhibits 23
SIGNATURES 24
3 of 24
NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(amounts in thousands except per share amounts)
(unaudited)
Quarter Ended Year to Date Ended
---------------------- ----------------------
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net sales $1,953,480 $1,784,849 $3,488,970 $3,120,321
Cost of sales and related
buying and occupancy costs (1,270,892) (1,194,429) (2,243,824) (2,080,524)
---------- ---------- ---------- ----------
Gross profit 682,588 590,420 1,245,146 1,039,797
Selling, general and
administrative expenses (536,233) (492,296) (988,967) (912,622)
---------- ---------- ---------- ----------
Operating income 146,355 98,124 256,179 127,175
Interest expense, net (14,091) (26,134) (50,775) (46,362)
Service charge income
and other, net 43,002 36,081 82,489 71,713
---------- ---------- ---------- ----------
Earnings before income taxes 175,266 108,071 287,893 152,526
Income tax expense (68,351) (42,200) (112,251) (59,500)
---------- ---------- ---------- ----------
Net earnings $ 106,915 $ 65,871 $ 175,642 $ 93,026
========== ========== ========== ==========
Basic earnings per share $ 0.76 $ 0.48 $ 1.26 $ 0.69
========== ========== ========== ==========
Diluted earnings per share $ 0.75 $ 0.48 $ 1.23 $ 0.68
========== ========== ========== ==========
Basic shares 140,735 135,844 139,922 135,710
========== ========== ========== ==========
Diluted shares 143,497 136,338 142,741 136,016
========== ========== ========== ==========
Cash dividends paid per share
of common stock outstanding $ 0.11 $ 0.10 $ 0.22 $ 0.20
========== ========== ========== ==========
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
4 of 24
NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
July 31, January 31, August 2,
2004 2004 2003
---------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 319,332 $ 340,281 $ 241,940
Short-term investments 165,575 176,000 69,627
Accounts receivable, net 721,510 666,811 726,596
Retained interest in accounts receivable 381,940 272,294 218,401
Merchandise inventories 1,024,853 901,623 1,019,467
Current deferred tax assets 132,158 121,681 111,127
Prepaid expenses 48,105 46,153 44,547
---------- ---------- ----------
Total current assets 2,793,473 2,524,843 2,431,705
Land, buildings and equipment (net of
accumulated depreciation of $2,221,299,
$2,121,158 and $2,014,814 1,772,752 1,807,778 1,820,870
Goodwill, net 51,714 51,714 51,714
Tradename, net 84,000 84,000 84,000
Other assets 110,942 100,898 97,246
---------- ---------- ----------
TOTAL ASSETS $4,812,881 $4,569,233 $4,485,535
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 699,432 $ 458,809 $ 617,172
Accrued salaries, wages
and related benefits 241,823 276,007 212,479
Other accrued expenses 305,992 314,753 283,377
Income taxes payable 86,309 66,157 76,192
Current portion of long-term debt 103,129 6,833 6,084
---------- ---------- ----------
Total current liabilities 1,436,685 1,122,559 1,195,304
Long-term debt 927,227 1,227,410 1,285,073
Deferred property incentives, net 391,837 407,856 406,314
Other liabilities 185,692 177,399 152,535
Shareholders' Equity:
Common stock, no par:
500,000 shares authorized;
141,436, 138,377 and 135,891 shares
issued and outstanding 517,718 424,645 362,293
Unearned stock compensation (448) (597) (746)
Retained earnings 1,346,035 1,201,093 1,080,002
Accumulated other comprehensive
earnings 8,135 8,868 4,760
---------- ---------- ----------
Total shareholders' equity 1,871,440 1,634,009 1,446,309
---------- ---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,812,881 $4,569,233 $4,485,535
========== ========== ==========
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
5 of 24
NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Year to Date Ended
------------------------
July 31, August 2,
2004 2003
---------- ----------
As Restated, see Note 9
-------------------------
OPERATING ACTIVITIES:
Net earnings $175,642 $93,026
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 130,235 123,349
Amortization of deferred property incentives
and other, net (15,690) (12,988)
Stock-based compensation expense 5,482 1,815
Deferred income taxes, net (3,595) 1
Tax benefit on stock option exercises 17,823 252
Provision for bad debt expense 12,731 14,386
Change in operating assets and liabilities:
Accounts receivable, net (68,087) (85,399)
Retained interest in accounts receivable (111,110) (91,371)
Merchandise inventories (111,810) (62,209)
Prepaid expenses (463) (973)
Other assets (10,462) (6,188)
Accounts payable 193,469 224,034
Accrued salaries, wages and related benefits (34,864) (3,588)
Other accrued expenses (8,710) 4,307
Income taxes payable 1,505 13,247
Property incentives 689 28,908
Other liabilities 19,529 9,387
---------- ----------
Net cash provided by operating activities 192,314 249,996
---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (102,201) (131,874)
Proceeds from sale of assets 5,473 -
Sales of short-term investments 1,979,050 838,618
Purchases of short-term investments (1,968,625) (786,979)
Other, net 205 106
---------- ----------
Net cash used in investing activities (86,098) (80,129)
---------- ----------
FINANCING ACTIVITIES:
Principal payments on long-term debt (201,325) (46,108)
Increase in cash book overdrafts 33,959 12,597
Proceeds from exercise of stock options 64,624 1,661
Proceeds from employee stock purchases 6,277 4,458
Cash dividends paid (30,700) (27,129)
Other, net - 2,341
---------- ----------
Net cash used in financing activities (127,165) (52,180)
---------- ----------
Net (decrease) increase in cash and cash equivalents (20,949) 117,687
Cash and cash equivalents at beginning of period 340,281 124,253
---------- ----------
Cash and cash equivalents at end of period $319,332 $241,940
========== ==========
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 1 - Summary of Significant Accounting Policies
Basis of Presentation
---------------------
The accompanying condensed consolidated financial statements should be read in
conjunction with the Notes to Consolidated Financial Statements contained in
our 2003 Amended Annual Report filed with the Securities and Exchange
Commission on April 8, 2005. The same accounting policies are followed for
preparing quarterly and annual financial data. All adjustments necessary for
the fair presentation of the results of operations, financial position and
cash flows have been included and are of a normal, recurring nature.
Our business, like that of other retailers, is subject to seasonal
fluctuations. Our Anniversary sale in July and the holidays in December
typically result in higher sales in the second and fourth quarters of the
fiscal year. Accordingly, results for any quarter are not necessarily
indicative of the results that may be achieved for a full fiscal year.
Critical Accounting Policies
----------------------------
The preparation of our financial statements requires that we make estimates
and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and disclosure of contingent assets and liabilities.
We regularly evaluate our estimates including those related to doubtful
accounts, inventory valuation, intangible assets, income taxes, self-insurance
liabilities, post-retirement benefits, sales return accruals, contingent
liabilities and litigation. We base our estimates on historical experience
and other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ from these estimates. Our
accounting policies and methodologies in 2004 are consistent with those
discussed in our 2003 Amended Annual Report.
Nordstrom fsb, the Company's wholly-owned bank subsidiary, offers a co-branded
VISA credit card program to its customers. As of July 31, 2004, the total
receivable balance of the VISA credit card program was $570,400. Nordstrom
Credit Card Master Note Trust has issued $200,000 of asset backed notes that
are securitized by the VISA credit card receivable pool. The remaining
portion of the VISA credit card receivable pool is held in certificated form;
it is accounted for as securitized investments in accordance with accounting
principles generally accepted in the United States and previously published
views of the Securities and Exchange Commission (SEC) staff.
Nordstrom fsb is regulated by the U.S. Department of the Treasury Office of
Thrift Supervision ("OTS"). On September 1, 2004, the OTS directed Nordstrom,
Inc. to account for a portion of its retained interest in the VISA credit card
receivable pool as loan receivables instead of as securitized investments. At
this time, we are working to resolve the difference between the accounting
treatment asked for by the OTS and our accounting treatment. Our accounting is
consistent with the advice of our independent auditors. If the accounting
treatment asked for by the OTS were to be applied to our full retained
interest in accounts receivable balance, we would combine that amount
($381,940 as of July 31, 2004) with accounts receivable, net, reduce the
unrealized gain recorded in other comprehensive income ($3,871, net of tax),
and establish an additional allowance for loan losses (up to approximately
$17,200, or $10,500 net of tax). We are continuing to discuss this matter
with the OTS, and we expect to receive input from the SEC staff to aid in the
resolution of this matter in the third quarter of 2004.
7 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 1 - Summary of Significant Accounting Policies (Cont.)
Reclassifications
----------------
Certain reclassifications of previously reported balances have been made to
conform with our current presentation.
See Note 9 for a discussion of the significant reclassifications and a
reconciliation of amounts previously reported to those shown herein.
Stock Compensation
------------------
We apply APB No. 25, "Accounting for Stock Issued to Employees," in measuring
compensation costs under our stock-based compensation programs, which is
described more fully in our 2003 Annual Report.
If we had elected to recognize compensation cost based on the fair value of
the options and shares at grant date, net earnings and earnings per share
would have been as follows:
Quarter Ended Year to Date Ended
---------------------- ----------------------
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net earnings, as reported $106,915 $65,871 $175,642 $93,026
Add: stock-based compensation
expense included in reported
net earnings, net of tax 2,573 1,054 3,344 1,107
Deduct: stock-based
compensation expense
determined under fair value,
net of tax (6,649) (4,451) (12,300) (10,727)
---------- ---------- ---------- ----------
Pro forma net earnings $102,839 $62,474 $166,686 $83,406
========== ========== ========== ==========
Earnings per share:
Basic - as reported $0.76 $0.48 $1.26 $0.69
Diluted - as reported $0.75 $0.48 $1.23 $0.68
Basic - pro forma $0.73 $0.46 $1.19 $0.61
Diluted - pro forma $0.72 $0.46 $1.17 $0.61
8 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 2 - Postretirement Benefits
The expense components of our Supplemental Executive Retirement Plan, which
provides retirement benefits to certain officers and select employees, are as
follows:
Quarter Ended Year to Date Ended
------------------------ ------------------------
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Service cost $372 $205 $744 $410
Interest cost 991 855 1,982 1,710
Amortization of net loss 386 188 772 376
Amortization of prior
service cost 240 173 480 346
----------- ----------- ----------- -----------
Total expense $1,989 $1,421 $3,978 $2,842
=========== =========== =========== ===========
Note 3 - Earnings Per Share
Quarter Ended Year to Date Ended
------------------------ ------------------------
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net earnings $106,915 $65,871 $175,642 $93,026
=========== =========== =========== ===========
Basic shares 140,735 135,844 139,922 135,710
Dilutive effect of
stock options and
performance share units 2,762 494 2,819 306
----------- ----------- ----------- -----------
Diluted shares 143,497 136,338 142,741 136,016
=========== =========== =========== ===========
Basic earnings per share $0.76 $0.48 $1.26 $0.69
Diluted earnings per share $0.75 $0.48 $1.23 $0.68
Antidilutive stock options - 8,225 10 9,687
Note 4 - Accounts Receivable
The components of accounts receivable are as follows:
July 31, January 31, August 2,
2004 2004 2003
----------- ----------- -----------
Trade receivables:
Unrestricted $24,228 $25,228 $27,584
Restricted 618,109 589,992 638,572
Allowance for doubtful accounts (19,934) (20,320) (21,146)
----------- ----------- -----------
Trade receivables, net 622,403 594,900 645,010
Other 99,107 71,911 81,586
----------- ----------- -----------
Accounts receivable, net $721,510 $666,811 $726,596
=========== =========== ===========
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 4 - Accounts Receivable (Cont.)
The restricted private label receivables back the $300,000 Class A notes and
the $150,000 variable funding note renewed in May 2004. Other accounts
receivable consist primarily of third party credit card receivables, vendor
receivables and cosmetic rebate receivables, which are believed to be fully
realizable as they are collected soon after they are earned.
Note 5 - Debt
During the first quarter of 2004, we retired $196,770 of our 8.95% senior
notes and $973 of our 6.7% medium-term notes for a total cash payment of
$219,587. We recognized $20,842 of net expense in the first quarter of 2004
related to this purchase.
In May 2004, we replaced our existing $300,000 unsecured line of credit with a
$350,000 unsecured line of credit, which is available as liquidity support for
our commercial paper program. Under the terms of the agreement, we pay a
variable rate of interest based on LIBOR plus a margin of 0.31%. The margin
increases to 0.41% if more than $175,000 is outstanding on the facility. The
line of credit agreement expires in three years and contains restrictive
covenants, which include maintaining a leverage ratio. We also pay a
commitment fee for the line based on our debt rating.
Also in May 2004, we renewed our variable funding note backed by Nordstrom
private label receivables and reduced the capacity by $50,000 to $150,000.
This note is renewed annually and interest is paid based on the actual cost of
commercial paper plus specified fees. We also pay a commitment fee for the
note based on the amount of the facility.
We did not make any borrowings under our unsecured line of credit or our
variable funding note backed by Nordstrom private label receivables during
2004.
We have an interest rate swap outstanding recorded in other liabilities. Our
swap has a $250,000 notional amount, expires in 2009 and is designated as a
fully effective fair value hedge. Under the agreement, we received a fixed
rate of 5.63% and paid a variable rate based on LIBOR plus a margin of 2.3%
set at six-month intervals (5.095% at July 31, 2004.) The fair value of our
interest rate swap is as follows:
July 31, January 31, August 2,
2004 2004 2003
----------- ----------- -----------
Interest rate swap fair value ($11,901) ($8,091) ($15,283)
10 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 6 - Comprehensive Net Earnings
Year to Date Ended
------------------------
July 31, August 2,
2004 2003
----------- -----------
Net earnings $175,642 $93,026
Foreign currency translation adjustment 160 1,670
Securitization adjustment, net of tax of $571
and ($970) (893) 1,517
SERP adjustment, net of tax $0 and $721 - (1,127)
----------- -----------
Comprehensive net earnings $174,909 $95,086
=========== ===========
Note 7 - Segment Reporting
The following tables set forth the information for our reportable segments and
a reconciliation to the consolidated totals:
Quarter ended Retail Credit Catalog/ Corporate
July 31, 2004 Stores Operations Internet and Other Eliminations Total
---------------------------------------------------------------------------------------------------
Net sales $1,868,808 $- $84,672 $- $- $1,953,480
Service charge income - 39,054 - - - 39,054
Intersegment revenues 9,723 11,051 - - (20,774) -
Interest expense, net (138) (5,862) 18 (8,109) - (14,091)
Earnings before taxes 211,593 9,837 4,246 (50,410) - 175,266
Net earnings (loss) 129,070 6,000 2,589 (30,744) - 106,915
Quarter ended Retail Credit Catalog/ Corporate
August 2, 2003 Stores Operations Internet and Other Eliminations Total
---------------------------------------------------------------------------------------------------
Net sales $1,713,561 $- $71,288 $- $- $1,784,849
Service charge income - 34,603 - - - 34,603
Intersegment revenues 8,270 10,390 - - (18,660) -
Interest expense, net (24) (5,442) (4) (20,664) - (26,134)
Earnings before taxes 162,196 5,326 974 (60,425) - 108,071
Net earnings (loss) 98,833 3,242 597 (36,801) - 65,871
Year to date ended Retail Credit Catalog/ Corporate
July 31, 2004 Stores Operations Internet and Other Eliminations Total
---------------------------------------------------------------------------------------------------
Net sales $3,323,415 $- $165,555 $- $- $3,488,970
Service charge income - 79,210 - - - 79,210
Intersegment revenues 13,760 18,651 - - (32,411) -
Interest expense, net (263) (11,225) 87 (39,374) - (50,775)
Earnings before taxes 388,716 19,960 10,237 (131,020) - 287,893
Net earnings (loss) 237,153 12,177 6,245 (79,933) - 175,642
Assets 2,736,279 1,042,091 120,729 913,782 - 4,812,881
Year to date ended Retail Credit Catalog/ Corporate
August 2, 2003 Stores Operations Internet and Other Eliminations Total
---------------------------------------------------------------------------------------------------
Net sales $2,982,892 $- $137,429 $- $- $3,120,321
Service charge income - 68,535 - - - 68,535
Intersegment revenues 14,521 17,238 - - (31,759) -
Interest expense, net (118) (10,815) 12 (35,441) - (46,362)
Earnings before taxes 257,992 11,706 (1,485) (115,687) - 152,526
Net earnings (loss) 157,349 7,139 (905) (70,557) - 93,026
Assets 2,789,310 860,089 105,128 731,008 - 4,485,535
As of July 31, 2004, January 31, 2004, and August 2, 2003, Retail Stores
assets included $35,998 of goodwill and $84,000 of tradename, and
Catalog/Internet assets included $15,716 of goodwill. Goodwill and tradename
included in all segments totaled $135,714.
11 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 8 - Litigation
We are involved in routine claims, proceedings, and litigation arising from
the normal course of our business. We do not believe any such claim,
proceeding or litigation, either alone or in aggregate, will have a material
impact on our results of operations, financial position, or liquidity.
Note 9 - Restatement and Reclassifications
Subsequent to issuance of our 2004 quarterly financial statements, we have
corrected two errors in our previously issued financial statements: the
statements of cash flows presentation of property incentive cash inflows and
the balance sheet classification of leased assets that were previously treated
as sale-leaseback transactions. Our previously reported net earnings, earnings
per share and shareholders' equity are not impacted by these corrections.
Statements of cash flows presentation of property incentives cash inflows: On
February 7, 2005, the Chief Accountant of the U.S. Securities and Exchange
Commission ("SEC") released a letter expressing the SEC's views on certain
lease accounting matters and their application under generally accepted
accounting principles in the United States of America. Following the issuance
of this letter, we reviewed our lease accounting policies and determined that
our classification of property incentives in our consolidated statements of
cash flows was not in accordance with GAAP.
We historically recognized property incentives in our consolidated statements
of cash flows as a separate line item in investing activities. After a review
of our lease accounting policies, we determined that property incentives
should be classified in operating activities and, accordingly, have restated
our statements of cash flows.
Leased assets previously treated as sale-leaseback transactions: From 1998 to
2000, we partnered with developers to build five new full-line stores. We
controlled the construction phase of the new stores' development and we
received payments from the developers to offset a portion of the related
capital expenditures. In our previously issued financial statements, we
treated those stores as being sold to and leased back from the developer. As
we analyzed our lease accounting in connection with the SEC Staff's letter
discussed above, we determined that sale-leaseback accounting treatment was
not correct because we have ongoing involvement at the stores. We have
restated our previously issued balance sheets by classifying the stores'
assets in land, buildings and equipment, the developer payment in deferred
property incentives, and eliminating the net of those two balances, which was
previously recorded in other assets and prepaid expenses. The impact to
earnings is not material.
Reclassifications
We have reclassified balances in our previously issued financial statements to
conform to our current presentation. The principal reclassification item is as
follows:
12 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 9 - Restatement and Reclassifications (cont.)
Auction rate securities: In order to maximize our earnings on available
capital, we invest in high-quality bonds known as Auction Rate Securities
("ARS"), which we had classified as cash equivalents in previously issued
financial statements. The interest rates for ARS that we invest in are set for
short periods, ranging from seven to 35 days, via auction. At the end of each
interest period, we choose to rollover our holdings or redeem the investment
for cash. A `market maker' facilitates the redemption of the ARS and the
underlying issuers are not required to redeem the investments within 90 days
of our purchase of the investments. We have reclassified $165,575, $176,000
and $69,627 at the end of July 31, 2004, January 31, 2004 and August 2, 2003
to short term investments and we have reflected the purchases and sales of
these securities in our statements of cash flows for 2003 through 2004.
In addition to this reclassification, we have revised the grouping of some
liabilities within the current liabilities section of the 2003 and 2004
balance sheets.
The following table summarizes the impacts of the restatements and
reclassifications on the previously issued financial statements:
Year to Date Ended July 31, 2004
-----------------------------------------------
As As Restated
Originally Restatement Reclass and
Reported Adjustments Adjustments Reclassified
---------- ----------- ----------- ------------
Consolidated Statement of
Cash Flows
Net cash provided by
operating activities $ 191,625 $ 689 $ - $ 192,314
Net cash used in investing
activities (95,834) (689) 10,425 (86,098)
---------- ----------- ----------- ------------
Consolidated Balance Sheet July 31, 2004
------------------------------------------------
Cash and cash equivalents $ 484,907 $ - $ (165,575) $ 319,332
Short-term investments - - 165,575 165,575
Prepaid expenses 52,194 (4,089) - 48,105
Total current assets 2,797,562 (4,089) - 2,793,473
Land, buildings and equipment
net 1,691,507 81,245 - 1,772,752
Other assets 158,561 (47,619) - 110,942
Total assets 4,783,344 29,537 - 4,812,881
Accounts payable 805,098 - (105,666) 699,432
Other accrued expenses 200,326 - 105,666 305,992
Total current liabilities 1,436,685 - - 1,436,685
Deferred property incentives,
net 362,300 29,537 - 391,837
Total liabilities and
shareholders' equity 4,783,344 29,537 - 4,812,881
---------- ----------- ----------- ------------
13 of 24
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except per share amounts)
(unaudited)
Note 9 - Restatement and Reclassifications (cont.)
Year to Date Ended August 2, 2003
-----------------------------------------------
As As Restated
Originally Restatement Reclass and
Reported Adjustments Adjustments Reclassified
---------- ----------- ----------- ------------
Consolidated Statement of
Cash Flows
Net cash provided by
operating activities $ 221,088 $ 28,908 $ - $ 249,996
Net cash used in investing
activities (102,860) (28,908) 51,639 (80,129)
---------- ----------- ----------- ------------
Consolidated Balance Sheet August 2, 2003
------------------------------------------------
Cash and cash equivalents $ 311,567 $ - $ (69,627) $ 241,940
Short-term investments - - 69,627 69,627
Prepaid expenses 48,053 (3,506) - 44,547
Total current assets 2,435,211 (3,506) - 2,431,705
Land, buildings and equipment
net 1,735,202 85,668 - 1,820,870
Other assets 147,876 (50,630) - 97,246
Total assets 4,454,003 31,532 - 4,485,535
Accounts payable 709,108 - (91,936) 617,172
Other accrued expenses 191,441 - 91,936 283,377
Total current liabilities 1,195,304 - - 1,195,304
Deferred property incentives,
net 374,782 31,532 - 406,314
Total liabilities and
shareholders' equity 4,454,003 31,532 - 4,485,535
---------- ----------- ----------- ------------
14 of 24
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of our 2003 Amended Annual Report. All dollar
amounts are in millions except per share amounts.
RESULTS OF OPERATIONS:
----------------------
Overview
--------
Earnings for the second quarter of 2004 increased 62% to $106.9 or $0.75 per
diluted share from $65.9 or $0.48 per diluted share for the same period in
2003. For the year to date period ended July 31, 2004, earnings increased 89%
to $175.6 or $1.23 per diluted share from $93.0 or $0.68 per diluted share for
the same period in 2003. Our results improved in the quarter and year to date
periods due to strong sales, significant improvement in gross margin and
overall expense leverage.
Sales
-----
Total sales increased 9.4% for the quarter and 12.5% year to date on a 4-5-4
comparable basis due to substantial same-store sales increases and store
openings. Same-store sales on a 4-5-4 comparable basis increased 6.8% for the
quarter and 9.5% year to date. The sales growth for the quarter and year to
date periods is attributable to a strong Anniversary sale event, our
continuous improvement in merchandising efforts, supported by our enhanced
information systems, and the improved overall retail environment, especially
in the first quarter. In the twelve months ended July 31, 2004, we have
opened four full-line stores and two Nordstrom Rack stores. See our GAAP
sales reconciliation on page 16.
All of our geographic regions and major merchandise divisions reported same-
store sales increases in the second quarter and year to date.
Gross Profit
------------
Second Quarter Year to Date
------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- --------
Gross profit as a percent of sales 34.9% 33.1% 35.7% 33.3%
Gross profit as a percentage of sales improved 180 basis points for the
quarter and 240 basis points for the year to date period ended July 31, 2004.
The quarter and year to date performance was due to increased sales volume and
lower markdowns resulting from our ongoing improvement in managing inventory.
On a same-store basis, our inventory balance as of July 31, 2004 declined 1.5%
compared to August 2, 2003.
Selling, General and Administrative Expense
-------------------------------------------
Second Quarter Year to Date
------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- --------
Selling, general and
administrative expense
as a percent of sales 27.4% 27.6% 28.4% 29.2%
15 of 24
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT.)
Selling, general and administrative expense as a percent of sales improved for
the quarter and year to date period ended July 31, 2004 due primarily to
overall expense control and leverage on our same-store sales growth. We saw
improvements in all of our controllable core operating expense components.
Specifically, we were able to leverage the favorable sales performance in non-
selling labor and other discretionary costs. This was partially offset by an
increase in incentive compensation costs as a result of our improved operating
performance.
Interest Expense
----------------
Interest expense, net decreased $12.0 for the quarter ended July 31, 2004 when
compared to the same period in 2003 due to $6.4 of debt prepayment premiums
recorded in 2003 and a reduction in outstanding borrowings in 2004.
Interest expense, net for the year to date period ended July 31, 2004
increased due to $20.8 in additional expense incurred in the current year
related to debt retirement, offset by $6.4 in debt retirement expenses for the
prior year. Interest expense on outstanding debt decreased versus the same
period last year primarily due to the lower overall debt levels. Over the 12
months ended July 31, 2004, we have retired $260.1 of our outstanding long-
term debt.
Service Charge Income and Other
-------------------------------
Service charge income and other, net increased $6.9 for the quarter and $10.8
for the year to date periods ended July 31, 2004 primarily due to income
recorded from our VISA securitization. The quarter and year to date service
charge income benefited from substantial increases in our VISA receivables
compared to the same periods in 2003.
Seasonality
------------
Our business, like that of other retailers, is subject to seasonal
fluctuations. Our Anniversary sale in July and the holidays in December
typically result in higher sales in the second and fourth quarters of the
fiscal year. Accordingly, results for any quarter are not necessarily
indicative of the results that may be achieved for a full fiscal year.
GAAP Sales Reconciliation
-------------------------
We converted to a 4-5-4 Retail Calendar at the beginning of 2003. This change
in our fiscal calendar has resulted in one less day of sales being included in
our year to date 2004 results versus the same period in the prior year. Sales
performance numbers included in this document have been calculated on a
comparative 4-5-4 basis. We believe that adjusting for the difference in days
provides a more comparable basis from which to evaluate sales performance.
The following reconciliation bridges the reported GAAP sales to the 4-5-4
comparable sales.
Dollar % Change % Change
Sales reconciliation ($M) YTD 2003 YTD 2004 Increase Total Sales Comp Sales
-------- -------- ---------- ----------- ----------
Number of days GAAP 183 182
GAAP sales $3,120.3 $3,489.0 $368.7 11.8% N/A
Less Feb. 1, 2003 sales ($18.2) --
-------- --------
Reported 4-5-4 sales $3,102.1 $3,489.0 $386.9 12.5% 9.5%
======== ========
4-5-4 Adjusted days 182 182
16 of 24
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT.)
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
In 2004, we used our cash flow from operations for investments in new stores,
store remodels and technology, for dividends to our shareholders, and to pre-
pay a portion of our long term debt. We have not borrowed funds in 2004.
Cash Flow from Operations
-------------------------
Cash flow provided by operating activities decreased by $57.7 to $192.3 in
2004. Higher net earnings were offset by our merchandise purchase and payment
flow changes in 2004 as compared to 2003, increased performance-based
compensation payments and decreased property incentive receipts due to fewer
store openings. Toward the end of 2003 and into 2004, we have achieved a
more even flow of merchandise purchases in relation to our sales trends. The
merchandise inventory increase in 2004 is in sync with our sales growth and
the seasonal nature of our business; the payables leverage we achieved on this
inventory growth is consistent with our merchandising improvements. The
improvement in our 2003 financial results as compared to 2002 resulted in an
increase in our performance-based compensation payments in 2004 as compared to
the prior year.
Cash Flow Used in Investing
---------------------------
Net cash used in investing activities increased in 2004 as compared to 2003
from the reduction in our short-term investments, which was used to repurchase
outstanding debt. Compared to the prior year, we focused our capital
expenditures on the improvement of existing facilities while decreasing our
spending on new store openings and information systems. Year to date, we
opened one full-line store in Charlotte, NC. We expect to open one full-line
store in Miami, FL in November 2004. In the first half of 2003, we opened one
full-line store; in the second half of 2003, we opened three full-line stores
and two Nordstrom Rack stores.
Cash Flow Used in Financing
---------------------------
For the year to date period ended July 31, 2004, cash used in financing
activities increased primarily due to our current year debt repurchase, offset
by an increase in the proceeds received from employee stock option exercises
(due to the increase in the price of our common stock in 2004) and
disbursement timing differences that increased our cash book overdraft
balance.
During the first quarter of 2004, we retired $196.8 of our 8.95% senior notes
and $1.0 of our 6.7% medium-term notes for a total cash payment of $219.6. We
recorded $20.8 of net expense in the first quarter of 2004 related to these
purchases.
In May 2004, we replaced our existing $300.0 unsecured line of credit with a
$350.0 unsecured line of credit, which is available as liquidity support for
our commercial paper program. Under the terms of the agreement, we pay a
variable rate of interest based on LIBOR plus a margin of 0.31%. The margin
increases to 0.41% if more than $175.0 is outstanding on the facility. The
line of credit agreement expires in three years and contains restrictive
covenants, which include maintaining a leverage ratio. We also pay a
commitment fee for the line based on our debt rating.
17 of 24
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT.)
Also in May 2004, we renewed our variable funding note backed by Nordstrom
private label receivables and reduced the capacity by $50.0 to $150.0. This
note is renewed annually and interest is paid based on the actual cost of
commercial paper plus specified fees. We also pay a commitment fee for the
note based on the amount of the facility.
We did not make any borrowings under our unsecured line of credit or our
variable funding note backed by Nordstrom private label receivables during
2004.
In August 2004, the Board of Directors authorized $300.0 of share repurchases.
This authorization extends for three years to August 2007, although we expect
the shares to be acquired through open market transactions during the next 12
to 24 months. This replaces the current remaining share repurchase authority
of $82.4. The actual number and timing of share repurchases will be subject
to market conditions and applicable SEC rules.
We maintain a level of liquidity to allow us to cover our seasonal cash needs
and rely on short-term borrowings only as needed. We believe that our
operating cash flows, existing cash and available credit facilities are
sufficient to finance our cash requirements for the next 12 months. We plan
to pay the remaining $96.5 of our 6.7% medium-term notes due in July 2005 with
existing cash and cash from operations.
Over the long term, we manage our cash and capital structure to strengthen our
financial position and maintain flexibility for future strategic initiatives.
We continuously assess our debt and leverage levels, capital expenditure
requirements, principal debt payments, dividend payouts, potential share
repurchases, and future investments or acquisitions. We believe our operating
cash flows, existing cash, available credit facilities, as well as any
potential future facilities will be sufficient to fund these scheduled future
payments and potential long-term initiatives.
CRITICAL ACCOUNTING POLICIES:
-----------------------------
The preparation of our financial statements requires that we make estimates
and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and disclosure of contingent assets and liabilities.
We regularly evaluate our estimates including those related to doubtful
accounts, inventory valuation, intangible assets, income taxes, self-insurance
liabilities, post-retirement benefits, sales return accruals, contingent
liabilities and litigation. We base our estimates on historical experience
and other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ from these estimates. Our
accounting policies and methodologies in 2004 are consistent with those
discussed in our 2003 Amended Annual Report.
Nordstrom fsb, the Company's wholly-owned bank subsidiary, offers a co-branded
VISA credit card program to its customers. As of July 31, 2004, the total
receivable balance of the VISA credit card program was $570.4. Nordstrom
Credit Card Master Note Trust has issued $200.0 of asset backed notes that are
securitized by the VISA credit card receivable pool. The remaining portion of
the VISA credit card receivable pool is held in certificated form; it is
accounted for as securitized investments in accordance with accounting
principles generally accepted in the United States and previously published
views of the Securities and Exchange Commission (SEC) staff.
18 of 24
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT.)
Nordstrom fsb is regulated by the U.S. Department of the Treasury Office of
Thrift Supervision ("OTS"). On September 1, 2004, the OTS directed Nordstrom,
Inc. to account for a portion of its retained interest in the VISA credit card
receivable pool as loan receivables instead of as securitized investments. At
this time, we are working to resolve the difference between the accounting
treatment asked for by the OTS and our accounting treatment. Our accounting is
consistent with the advice of our independent auditors. If the accounting
treatment asked for by the OTS were to be applied to our full retained
interest in accounts receivable balance, we would combine that amount ($381.9
as of July 31, 2004) with accounts receivable, net, reduce the unrealized gain
recorded in other comprehensive income ($3.9, net of tax), and establish an
additional allowance for loan losses (up to approximately $17.2, or $10.5 net
of tax). We are continuing to discuss this matter with the OTS, and we expect
to receive input from the SEC staff to aid in the resolution of this matter in
the third quarter of 2004.
FORWARD-LOOKING INFORMATION CAUTIONARY STATEMENT:
-------------------------------------------------
The preceding disclosures included forward-looking statements regarding our
performance, liquidity and adequacy of capital resources. These statements
are based on our current assumptions and expectations and are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. Forward-looking statements are qualified by
the risks and challenges posed by our ability to predict fashion trends,
consumer apparel buying patterns, our ability to control costs, weather
conditions, hazards of nature such as earthquakes and floods, trends in
personal bankruptcies and bad debt write-offs, changes in interest rates,
employee relations, our ability to continue our expansion plans, and the
impact of economic and competitive market forces, including the impact of
terrorist activity or the impact of a war on us, our customers and the retail
industry. As a result, while we believe there is a reasonable basis for the
forward-looking statements, you should not place undue reliance on those
statements. This discussion and analysis should be read in conjunction with
the condensed consolidated financial statements.
Item 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, we
performed an evaluation under the supervision and with the participation of
management, including our President and Chief Financial Officer, of our
disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
under the Securities and Exchange Act of 1934 (the "Exchange Act")). Based
upon that evaluation, our President and our Chief Financial Officer concluded
that, as of the end of the period covered by this Quarterly Report, our
disclosure controls and procedures are effective in the timely recording,
processing, summarizing and reporting of material financial and non-financial
information.
In May 2004 we implemented a new human resources management system to replace
all of our mainframe legacy systems relating to human resources. This system
will enhance the integration with our existing financial systems and provide
us with improved management and information on our labor and benefits. Many
processes have been automated and the system lays the foundation for
additional improvements in the future. Management is taking the necessary
steps to monitor and maintain appropriate internal controls during this period
of change. These steps include testing before the implementation, deploying
resources to mitigate internal control risks, implementing reviews to ensure
the accuracy of our data and processes, and performing multiple levels of
reconciliations and analysis.
19 of 24
Item 4. CONTROLS AND PROCEDURES (CONT.)
Other than as described above, there has been no change in our internal
control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f)
of the Exchange Act) during our most recently completed fiscal quarter that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-------------------------
Cosmetics
---------
We were originally named as a defendant along with other department store and
specialty retailers in nine separate but virtually identical class action
lawsuits filed in various Superior Courts of the State of California in May,
June and July 1998 that have now been consolidated in Marin County Superior
Court. In May 2000, plaintiffs filed an amended complaint naming a number of
manufacturers of cosmetics and fragrances and two other retailers as
additional defendants. Plaintiffs' amended complaint alleges that the retail
price of the "prestige" or "Department Store" cosmetics sold in department and
specialty stores was collusively controlled by the retailer and manufacturer
defendants in violation of the Cartwright Act and the California Unfair
Competition Act.
Plaintiffs seek treble damages and restitution in an unspecified amount,
attorneys' fees and prejudgment interest, on behalf of a class of all
California residents who purchased cosmetics and fragrances for personal use
from any of the defendants during the four years prior to the filing of the
amended complaint. Defendants, including us, have answered the amended
complaint denying the allegations. The defendants have produced documents and
responded to plaintiffs' other discovery requests, including providing
witnesses for depositions.
We entered into a settlement agreement with the plaintiffs and the other
defendants on July 13, 2003. In furtherance of the settlement agreement, the
case was refiled in the United States District Court for the Northern District
of California on behalf of a class of all persons who currently reside in the
United States and who purchased "Department Store" cosmetics from the
defendants during the period May 29, 1994 through July 16, 2003. The Court
has given preliminary approval to the settlement. A summary notice of class
certification and the terms of the settlement has been disseminated to class
members. A hearing on whether the Court will grant final approval of the
settlement has been scheduled for November 16, 2004. If approved by the
Court, the settlement will result in the plaintiffs' claims and the claims of
all class members being dismissed, with prejudice, in their entirety. In
connection with the settlement agreement, the defendants will provide class
members with certain free products and pay the plaintiffs' attorneys' fees,
awarded by the Court up to $24 million. Our share of the cost of the
settlement will not have a material adverse effect on our financial condition,
results of operations or cash flows.
Other
-----
We are involved in various routine legal proceedings incidental to the
ordinary course of business. In management's opinion, the outcome of pending
legal proceedings, separately and in the aggregate, will not have a material
adverse effect on our business or consolidated financial condition.
20 of 24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
---------------------------------------------------------------------
(c) Repurchases
-----------
Total Total Number Maximum Number (or
Number of Average of Shares (or Units) (Approximate Dollar Value)
Shares Price Paid Purchased as Part of of Shares (or Units) that
(or Units) Per Share Publicly Announced May Yet Be Purchased Under
Purchased (or Units) Plans or Programs the Plans or Programs (2)
---------- ---------- -------------------- --------------------------
Feb. 2004 - - - $82 million
(2/1/04 to
2/28/04)
---------- ---------- -------------------- --------------------------
Mar. 2004 - - - $82 million
(2/29/04 to
4/3/04)
---------- ---------- -------------------- --------------------------
Apr. 2004 672 (1) $39.99 - $82 million
(4/4/04 to
5/1/04)
---------- ---------- -------------------- --------------------------
May. 2004 - - - $82 million
(5/2/04 to
5/29/04)
---------- ---------- -------------------- --------------------------
Jun. 2004 - - - $82 million
(5/30/04 to
7/3/04)
---------- ---------- -------------------- --------------------------
Jul. 2004 - - - $82 million
(7/4/04 to
7/31/04)
---------- ---------- -------------------- --------------------------
(1) The 672 shares redeemed were not part of a publicly announced repurchase
plan or program. These shares were owned and tendered by an employee to
Nordstrom as payment for an option exercise.
(2) In May 1995, the Board of Directors authorized $1.1 billion of share
repurchases, with no expiration date. As of July 31, 2004, we have $82
million remaining in share repurchases. In August 2004, the Board of
Directors authorized $300.0 million of share repurchases. For further
details, see the liquidity discussion in Part I, Item 2 Management's
Discussion and Analysis of Financial Condition and Results of Operations.
21 of 24
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
We held our Annual Shareholders Meeting on May 25, 2004, at which time the
shareholders voted on the following proposals:
(1) Election of Directors
Name of Candidate For Withheld
---------------------- ----------- -----------
D. Wayne Gittinger 127,401,661 3,744,178
Enrique Hernandez, Jr. 129,175,632 1,970,207
Jeanne P. Jackson 128,852,005 2,293,834
Bruce A. Nordstrom 128,896,633 2,249,206
John N. Nordstrom 128,899,784 2,246,055
Alfred E. Osborne, Jr., Ph.D. 124,174,502 6,971,336
William D. Ruckelshaus 124,134,089 7,011,750
Alison A. Winter 129,147,657 1,998,181
There were no abstentions and no broker non-votes.
(2) Approval of the Nordstrom, Inc. 2004 Equity Incentive Plan
The vote was 98,592,580 for, 16,437,312 against, and there were 773,699
abstentions. There were 15,342,248 broker non-votes.
(3) Approval of the Nordstrom, Inc. Executive Management Group Bonus Plan
The vote was 111,708,317 for, 3,164,523 against, and there were 930,751
abstentions. There were 15,342,248 broker non-votes.
(4) Ratification of the Appointment of Independent Auditors
The vote was 128,220,533 for, 2,223,774 against, and there were 701,532
abstentions. There were no broker non-votes.
22 of 24
Item 6. Exhibits
-----------------
10.1 Revolving Credit Facility dated May 14, 2004, between Registrant
and a group of commercial banks.
10.2 Nordstrom, Inc. Executive Management Group Bonus Plan is hereby
incorporated by reference from the Registrant's definitive proxy
statement filed with the Commission on April 15, 2004.
10.3 2004 Equity Incentive Plan is hereby incorporated by reference from
the Registrant's definitive proxy statement filed with the
Commission on April 15, 2004.
10.4 Commitment of Nordstrom, Inc. to Nordstrom fsb dated June 17, 2004.
10.5 Nordstrom fsb Segregated Earmarked Deposit Agreement And Security
Agreement by and between Nordstrom fsb and Nordstrom, Inc. dated
July 1, 2004.
31.1 Certification of President required by Section 302(a)
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer required by Section 302(a)
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of President regarding periodic report containing
financial statements pursuant to 18 U.S.C. 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer regarding periodic report
containing financial statements pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
23 of 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORDSTROM, INC.
(Registrant)
/s/ Michael G. Koppel
----------------------------------------------------
Michael G. Koppel
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: June 3, 2005
------------
24 of 24
NORDSTROM INC. AND SUBSIDIARIES
Exhibit Index
Exhibit Method of Filing
------- ----------------
10.1 Revolving Credit Facility dated Incorporated by reference from
May 14, 2004 between Registrant Registrant's Form 10-Q for the
and a group of commercial banks quarter ended July 31, 2004,
Exhibit 10.1
10.2 Nordstrom, Inc. Executive Management Incorporated by reference from
Group Bonus Plan Registrant's definitive proxy
statement filed with the
Commission on April 15, 2004.
10.3 2004 Equity Incentive Plan Incorporated by reference from
Registrant's definitive proxy
statement filed with the
Commission on April 15, 2004.
10.4 Commitment of Nordstrom, Inc. to Incorporated by reference from
Nordstrom fsb dated June 17, 2004 Registrant's Form 10-Q for the
quarter ended July 31, 2004,
Exhibit 10.4
10.5 Nordstrom fsb Segregated Earmarked Incorporated by reference from
Deposit Agreement And Security Registrant's Form 10-Q for the
Agreement by and between Nordstrom quarter ended July 31, 2004,
fsb and Nordstrom, Inc. dated Exhibit 10.4
July 1, 2004.
31.1 Certification of President Filed herewith electronically
required by Section 302(a) of
the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Filed herewith electronically
Officer required by Section 302(a)
of the Sarbanes-Oxley Act of 2002
32.1 Certification of President Furnished herewith electronically
regarding periodic report
containing financial statements
pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Furnished herewith electronically
Officer regarding periodic report
containing financial statements
pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002