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Nordstrom 10-Q 2009 Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended August 1, 2009
OR
For the transition period from ____________ to ____________
Commission file number 001-15059
NORDSTROM, INC.
(Exact name of Registrant as specified in its charter)
206-628-2111
(Registrant’s telephone number, including area code) 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 þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
YES þ NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
YES o NO þ
Common stock outstanding as of August 28, 2009: 216,755,725 shares of common stock
NORDSTROM, INC. AND SUBSIDIARIES
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PART
I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in millions except per share amounts) (Unaudited)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral
part of these financial statements.
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NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in millions) (Unaudited)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral
part of these financial statements.
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NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Amounts in millions except per share amounts)
(Unaudited)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral
part of these financial statements.
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NORDSTROM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in millions)
(Unaudited)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral
part of these financial statements.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit 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 2008 Annual Report on Form 10-K. The
same accounting policies are followed for preparing quarterly and annual financial information. 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, the holidays in December, and our Half-yearly sales events typically result in higher
sales in the second and fourth quarters of our fiscal years. Accordingly, results for any quarter
are not necessarily indicative of the results that may be achieved for a full fiscal year.
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 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 in 2009 are consistent with those discussed in our 2008 Annual Report on
Form 10-K.
Reclassification
In order to improve the transparency related to our Credit segment, we have reclassified credit
card revenues and expenses in our consolidated statements of earnings for the quarter and six
months ended August 2, 2008 to conform to our 2009 presentation. Credit card revenues were
previously included in finance charges and other, net in our consolidated statements of earnings
and selling, general and administrative expenses for our credit segment were previously included in
total selling, general and administrative expenses in our consolidated statements of earnings.
These reclassifications, which were made beginning with our 2008 Annual Report on Form 10-K, did
not impact our reported net earnings, earnings per share or cash flows for the quarter and six
months ended August 2, 2008.
Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial
Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements — an
amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards
for a noncontrolling interest (minority interest) in a subsidiary, provides guidance on the
accounting for and reporting of the deconsolidation of a subsidiary, and increases transparency
through expanded disclosures. Specifically, SFAS 160 requires the recognition of a minority
interest as equity in the consolidated financial statements and separate from the parent company’s
equity. It also requires consolidated net earnings in the consolidated statement of earnings to
include the amount of net earnings attributable to minority interest. This statement became
effective for Nordstrom as of the beginning of fiscal year 2009 and did not have a material impact
on our consolidated financial statements.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures
About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133
(“SFAS 161”). SFAS 161 expands the disclosure requirements in SFAS 133 about an entity’s derivative
instruments and hedging activities. This statement became effective for Nordstrom as of the
beginning of fiscal year 2009 and did not have a material impact on our consolidated financial
statements.
In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB 28-1, Disclosures about Fair
Value of Financial Instruments (“FSP FAS 107-1 and APB 28-1”). FSP FAS 107-1 and APB 28-1, which
requires disclosure about the fair value of financial instruments in interim financial statements
as well as in annual financial statements, is effective for interim periods ending after June 15,
2009, but early adoption is permitted for interim periods ending after March 15, 2009. We have
adopted this guidance and have included the required disclosures in this Form 10-Q for the quarter
ended August 1, 2009. This FSP has not impacted our consolidated financial position or results of
operations, as its requirements are disclosure-only in nature.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts)
(Unaudited) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In May 2009, the FASB issued Statement of Accounting Standards No. 165, Subsequent Events (“SFAS
165”), which establishes general standards of accounting and disclosure for events that occur after
the balance sheet date but before financial statements are issued. This standard is effective for
reporting periods ending after June 15, 2009. We have included the required disclosures in this
Form 10-Q for the quarter ended August 1, 2009. SFAS 165 did not impact our consolidated financial
position or results of operations, as its requirements are disclosure-only in nature.
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, The FASB
Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting
Principles, a replacement of FASB Statement No. 162 (“SFAS 168”) which establishes the FASB
Accounting Standards Codification as the source of authoritative U.S. generally accepted accounting
principles (GAAP) (other than guidance issued by the SEC) to be used in the preparation of
financial statements. SFAS 168 is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The provisions of SFAS 168 will be applied prospectively
beginning in our third quarter of 2009 and the impact on our consolidated financial statements will
be disclosure-only in nature.
NOTE 2: ACCOUNTS RECEIVABLE
The components of accounts receivable are as follows:
The following table summarizes the restricted trade receivables:
The restricted trade receivables secure our Series 2007-1 Notes, the Series 2007-2 Notes and
our two variable funding notes. The restricted trade receivables relate to substantially all of our
Nordstrom private label card receivables and Nordstrom VISA credit card receivables.
The unrestricted trade receivables consist primarily of the remaining portion of our Nordstrom
private label and Nordstrom VISA credit card receivables and accrued finance charges not yet
allocated to customer accounts. Other accounts receivable consist primarily of credit card
receivables due from third-party financial institutions and vendor claims.
Our Nordstrom private label cards can be used only in Nordstrom stores, while the Nordstrom VISA
cards allow our customers the option of using the cards for purchases of Nordstrom merchandise and
services, as well as for purchases outside of Nordstrom. We record the Nordstrom private label and
VISA credit card receivables as trade receivables on our consolidated balance sheets at outstanding
principal, net of an allowance for doubtful accounts.
Cash flows from the use of both the private label cards and Nordstrom VISA cards for sales
originating at our Nordstrom stores are treated as an operating activity in the condensed
consolidated statements of cash flows as they relate to sales at Nordstrom. Cash flows arising from
the use of Nordstrom VISA cards outside of Nordstrom stores are treated as an investing activity
within the condensed consolidated statements of cash flows, as they represent loans made to our
customers for purchases at third parties.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts)
(Unaudited) NOTE 3: DEBT AND CREDIT FACILITIES
We hold both secured and unsecured debt. The primary collateral for our secured debt is our
Nordstrom private label card and Nordstrom VISA credit card receivables. A summary of long-term
debt is as follows:
As of August 1, 2009 and August 2, 2008, we had $375 and $260 classified as current portion of
long-term debt in our condensed consolidated balance sheets. As of August 1, 2009, this balance was
primarily composed of $350 related to our series 2007-1 notes due in April 2010. As of August 2,
2008, the current portion of long-term debt consisted primarily of $250 related to our senior notes
due in January 2009.
During the second quarter of 2009, we issued $400 senior unsecured notes at 6.75%, due June 2014.
After deducting the original issue discount of $1 and other fees and expenses of $3, net proceeds
from the offering were $396. We used a portion of the proceeds from the issuance to repay the $140
in outstanding issuances of commercial paper as of May 26, 2009, the date the senior notes were
issued.
We had no outstanding issuances under our $650 commercial paper program as of August 1, 2009. The
issuance of commercial paper has the effect, while it is outstanding, of reducing borrowing
capacity under our unsecured revolving credit facility by an amount equal to the principal amount
of commercial paper. As of August 1, 2009, we had no outstanding borrowings under our credit
facility. On August 14, 2009, we entered into a new unsecured revolving credit facility with a
capacity of $650. This new credit facility replaced our existing $650 unsecured line of credit,
which was scheduled to expire in November 2010. See further discussion of our $650 revolving credit
facility in Note 8: Subsequent Event.
Additionally, we had $300 in short-term capacity as of August 1, 2009 available under a Variable
Funding Note facility (“2007-A VFN”). As of August 1, 2009 we had no outstanding issuances against
this facility. The 2007-A VFN matures in November 2009 and can be cancelled if our debt ratings
fall below Standard & Poor’s BB+ rating or Moody’s Ba1 rating. As of September 9, 2009, our rating
by Standard & Poor’s was BBB+, four grades above the cancellation threshold, and by Moody’s was
Baa2, three grades above the cancellation threshold.
As of August 1, 2009, the fair value of long-term debt, including current maturities, using quoted
market prices of the same or similar issues, was $2,620.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts)
(Unaudited) NOTE 4: STOCK COMPENSATION PLANS
Stock-based compensation expense before income tax benefit was recorded in our condensed
consolidated statements of earnings as follows:
Stock Options
During the six months ended August 1, 2009, 4.9 options were granted, 0.5 options were exercised,
0.1 options expired and 0.3 options were cancelled. During the six months ended August 2, 2008, 2.2
options were granted, 0.5 options were exercised, and 0.1 options were cancelled. The weighted
average fair values per option at the date of grant was $7 and $15 in 2009 and 2008. We used the
following assumptions to estimate the fair value of stock options at the date of grant:
Performance Share Units
As of August 1, 2009, our liabilities included $1 for performance share units. As of both January
31, 2009 and August 2, 2008, we had no liabilities related to performance share units. For both the
six months ended August 1, 2009 and August 2, 2008, stock-based compensation expense related to
performance share units was approximately $1. As of August 1, 2009, the remaining unrecognized
stock-based compensation expense related to unvested performance share units was $3, which is
expected to be recognized over a weighted average period of 30 months. At January 31, 2009, 117,389
units were unvested. During the six months ended August 1, 2009, 144,891 units were granted, no
units vested and no units cancelled, resulting in an ending balance of 262,280 unvested units as of
August 1, 2009.
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts)
(Unaudited) NOTE 5: EARNINGS PER SHARE
The computation of earnings per share is as follows:
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts) (Unaudited) NOTE 6: SEGMENT REPORTING
We aggregate our full-line, Rack and Jeffrey stores into the Retail Stores segment and report
Direct as a separate segment. The Credit segment earns finance charges, interchange and late fee
income through operation of the Nordstrom private label and Nordstrom VISA credit cards. The Other
segment includes our product development group, which coordinates the design and production of
private label merchandise sold in our retail stores, and our distribution network. This segment
also includes our corporate center operations. The following tables set forth the information for
our reportable segments:
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar and share amounts in millions except per share, per option and unit amounts) (Unaudited) NOTE 7: CONTINGENT LIABILITIES
We are subject from time to time to various claims, proceedings and litigation arising from the
normal course of our business including lawsuits alleging violations of state and/or federal wage
and hour laws. Some of these suits purport or have been determined to be class actions and/or seek
substantial damages. The results of these claims, proceedings and litigation cannot be predicted
with certainty. However, 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
cash flows.
NOTE 8: SUBSEQUENT EVENT
On August 14, 2009, we entered into a new unsecured revolving credit facility with a capacity of
$650, which expires in August 2012. The new credit facility replaced our existing $650 unsecured
line of credit, which was scheduled to expire in November 2010. The new facility is available for
working capital, capital expenditures and other general corporate purposes, including as liquidity
support for our commercial paper program. Under the terms of the agreement, we pay a variable rate
of interest and a commitment fee based on our debt rating. Consistent with our previous unsecured
revolving credit facility, the new revolving credit facility requires that we maintain a leverage
ratio of not greater than four times Adjusted Debt to EBITDAR. The new facility also requires that
we maintain a fixed charge coverage ratio of at least two times, defined as:
Under the new credit facility we have the option to increase the revolving commitment by up to
$100, to a total of $750, provided that we obtain written consent from the lenders who choose to
increase their commitment. We have no borrowings under the new credit facility as of September 9,
2009.
We evaluated subsequent events through September 9, 2009, which is the date the financial
statements were issued. We are not aware of any significant events, other than those identified
above, which occurred subsequent to the balance sheet date but prior to September 9, 2009, that
would have a material impact on our financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Amounts in millions except per share and per square foot amounts) The following discussion should be read in conjunction with the Management’s Discussion and
Analysis section of our 2008 Annual Report on Form 10-K filed with the Commission on March 23,
2009.
FORWARD-LOOKING INFORMATION CAUTIONARY STATEMENT
Certain statements in this Quarterly Report on Form 10-Q contain “forward-looking” statements (as
defined in the Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties, including anticipated financial results, use of cash and liquidity, growth, store
openings and trends in our operations. Actual future results and trends may differ materially from
historical results or current expectations depending upon various factors including, but not
limited to:
These and other factors, including those factors described in Part I, “Item 1A. Risk Factors” in
our Form 10-K for the fiscal year ended January 31, 2009 and in Part II, “Item 1A. Risk Factors” on
page 28 of this report, could affect our financial results and trends and cause actual results and
trends to differ materially from those contained in any forward-looking statements we may provide.
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. We undertake no obligation to update or revise
any forward-looking statements to reflect subsequent events, new information or future
circumstances. This discussion and analysis should be read in conjunction with the Condensed
Consolidated Financial Statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) RESULTS OF OPERATIONS
Overview
Our second quarter typically is the second largest of the year in terms of net sales,
containing three of our five annual sales events: Half-Yearly Sale for Women and Kids, Half-Yearly
Sale for Men, and the Anniversary Sale. Although earnings per diluted share declined for the
quarter and six months ended August 1, 2009 compared to the same periods in 2008 as a result of
overall lower sales volume, solid execution of the Anniversary Sale combined with disciplined
inventory and expense management allowed us to exceed our earnings plans for the first half of
2009. However, we still remain cautious about the general economic environment.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Retail Stores, Direct and Other Segments
Summary
Our Retail Stores segment includes our full-line, Rack and Jeffrey stores; our Direct segment
includes our online store; and our Other segment includes our product development group and
corporate center operations. The following tables summarize the combined results of our Retail
Stores, Direct and Other segments for the quarter and six months ended August 1, 2009 compared with
the quarter and six months ended August 2, 2008:
1Gross profit is calculated as net sales less Retail Stores, Direct and Other
segments cost of sales and related buying and occupancy costs.
2Subtotals and totals may not foot due to rounding.
Net Sales
Our second quarter sale events are important contributors to our annual results. During the
quarter, our full-line stores hold clearance sales with our Half-Yearly Sale for Women & Kids and
our Half-Yearly Sale for Men. Our Anniversary Sale, held in July, is historically the biggest event
of the year, offering new merchandise at temporarily reduced prices. Sales results during these
events exhibited improvements over trends in non-event periods during the quarter ended August 1,
2009.
Total net sales decreased 6.2% for the quarter and 7.6% for the six months ended August 1, 2009,
compared with the same periods in the prior year as same-store sales declines for our full-line
stores were partially offset by positive performance by our Direct segment and same-store sales
increases at our Rack stores.
Same-store sales for our full-line stores decreased 12.3% for the quarter and 14.2% for the six
months ended August 1, 2009 compared to the same periods in 2008. Merchandise categories with
results above the same-store sales average for the quarter and six months ended August 1, 2009
included kids’ shoes & apparel and junior women’s apparel, while the largest decreases came in
designer apparel and men’s wear. Our merchants continue to work with our vendors to provide a
balanced and compelling merchandise offering to our customers.
Regionally, California, the Northwest and the Southwest continue to be challenging with same-store
sales below the full-line store average for both the quarter and year-to-date.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Our Rack channel delivered same-store sales increases of 0.8% for the quarter and 1.1% for the six
months ended August 1, 2009 compared to the same periods last year. For both periods, these results
were driven by growth in shoes and women’s apparel. Shoes benefited from the sale of junior women’s
and women’s footwear, while women’s apparel was led by casual tops, blouses and denim.
Sales for our Direct channel grew 3.5% for the quarter and 1.8% for the six months ended August 1,
2009 compared with the same periods last year. For both periods, the increases were driven by
dresses and women’s shoes. Dresses were led by special occasion while women’s shoes benefitted from
casual and junior women’s footwear.
We expect full year 2009 same-store sales to decrease in the range of 9% to 12%.
Gross Profit
1Gross profit rate is calculated as gross profit divided by net sales.
1Inventory turnover rate is calculated as the trailing 12 months cost of sales and
related buying and occupancy costs (for all segments) divided by 4-quarter average inventory.
Retail gross profit decreased $74 for the quarter and $172 for the six months ended August 1, 2009,
compared with the same periods in 2008. Our retail gross profit rate deteriorated 108 basis points
for the quarter and 150 basis points for the six months ended August 1, 2009 compared with the same
periods in 2008. Retail gross profit rate is made up of merchandise margin offset by buying and
occupancy costs. For both the quarter and six months ended August 1, 2009, the impact of our fixed
buying and occupancy costs as a percentage of reduced sales primarily drove the decrease in our
gross profit rate. Our merchandise margin rate was relatively flat for the quarter and declined
slightly for the six months ended August 1, 2009.
Our inventory turnover rate was approximately flat to last year. The decrease in average inventory
per square foot of 10.0% was consistent with our total company same-store sales decrease of 11.3%
for the six months ended August 1, 2009.
Based on our performance for the first half of 2009, we expect our retail gross profit rate for the
full year 2009 to decrease 50 to 100 basis points from 2008 levels of 35.1%.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Selling, General and Administrative Expenses
1Selling, general and administrative rate is calculated as selling, general and
administrative expenses for our Retail Stores, Direct and Other segments as a percentage of net
sales.
Selling, general and administrative expenses for our Retail Stores, Direct and Other segments
decreased 3%, or $14, compared with last year’s second quarter. Lower variable expenses as well as
fixed cost savings, partially offset by incentives tied to company performance and new store
expenses, drove the decrease. Variable expense dollars decreased consistent with the decrease in
sales while fixed cost reductions were primarily in advertising, services purchased and insurance.
During the second quarter, we increased our provision for performance related expense to reflect
the improved performance of the overall business relative to our plans. The second quarter of 2009
also includes $15 in expenses for the six full-line and eleven Rack stores opened since the second
quarter of 2008. Retail square footage increased 1.2, or 5.7% since the second quarter of 2008. The
increase in our selling, general and administrative rate of 88 basis points is primarily
attributable to the increase in performance based incentives, partially offset by improvement in
our variable selling, general and administrative rate due to a decrease in our variable labor rate.
For the six months ended August 1, 2009, our selling, general and administrative dollars decreased
$60 to $978 due primarily to lower variable expenses and fixed cost savings, partially offset by
$32 of incremental expenses related to our new stores opened since July 2008 and performance-based
incentives. Variable expenses decreased consistent with the decrease in sales, similar to the
second quarter. Reductions in fixed costs encompassed many areas including advertising, services
purchased, non-selling labor and depreciation. The increase in the performance-based incentives,
which was a result of better performance versus plan for the six months ended August 1, 2009
compared with the same period in 2008, was the primary driver of the 44 basis point increase in our
selling, general and administrative rate for the six months ended August 1, 2009.
We anticipate our retail selling, general and administrative expenses to decrease $100 to $150 for
2009.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Credit Segment
The Nordstrom credit card products are designed to grow retail sales and customer relationships by
providing superior payment products, services and loyalty benefits. We believe that owning our
credit card business allows us to fully integrate our rewards program with our retail stores and
provide superior service to our customers, thus deepening our relationship with them and driving
higher levels of customer loyalty. Each card enables participation in the Nordstrom Fashion
Rewards® program, through which customers accumulate points based on their level of spending (two
points per dollar spent at Nordstrom and one point per dollar spent outside of Nordstrom stores).
Upon reaching two thousand points, customers receive twenty dollars in Nordstrom Notes®, which can
be redeemed for goods or services in our stores. As customers increase their level of spending they
receive additional benefits, including rewards such as complimentary shipping and alterations in
our retail stores. We believe the Fashion Rewards program, including these additional rewards,
helps drive sales in our Retail Stores and Direct segments.
The table below illustrates a detailed view of the operational results of our Credit segment,
consistent with the segment disclosure provided in the notes to the condensed consolidated
financial statements. In order to view the total economic contribution of our credit card program,
intercompany merchant fees are also included in the table below. Intercompany merchant fees
represent the estimated intercompany income of our credit business from the usage of our cards in
the Retail Stores and Direct segments. To encourage the use of Nordstrom cards in our stores, the
Credit segment does not charge the Retail Stores and Direct segments an intercompany interchange
merchant fee. On a consolidated basis, we avoid these costs which would be incurred if our
customers used third-party cards.
Interest expense is assigned to the Credit segment in proportion to the amount of estimated capital
needed to fund our credit card receivables, which assumes a mix of 80% debt and 20% equity. The
average accounts receivable investment metric included in the following table represents our best
estimate of the amount of capital for our credit card program that is financed by equity. As a
means of assigning comparable cost of capital for our credit card business, we believe it is
important to maintain a capital structure similar to other financial institutions. Based on our
research, we have found that debt as a percentage of credit card receivables for other credit card
companies ranges from 70% to 90%. We believe that debt equal to 80% of our credit card receivables
is appropriate given our overall capital structure goals.
1Based on annualized credit card contribution (charge), net of tax for the quarter
and six months ended August 1, 2009 and August 2, 2008.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Net Credit Card Income
Credit card revenues include finance charges, interchange fees, late and other fees. The majority
of our credit accounts have finance charge rates that vary with changes in the prime rate.
Interchange fees are earned from the use of Nordstrom VISA credit cards at merchants outside of
Nordstrom.
Credit card revenues increased to $87 and $173 for the quarter and six months ended August 1, 2009
compared with $73 and $143 for the quarter and six months ended August 2, 2008, as a result of an
increase in our annual percentage rate terms implemented in the fourth quarter of 2008 and growth
in our accounts receivable balance.
Based on results for the six months ended August 1, 2009 as well as the previously implemented and
upcoming increases in annual percentage rate terms, we continue to expect our credit card revenues
for 2009 to increase $75 to $80 compared to 2008.
Interest expense decreased from $13 and $26 for the quarter and six months ended August 2, 2008 to
$10 and $20 for the quarter and six months ended August 1, 2009, due to declining variable interest
rates, partially offset by higher average borrowings.
Cost of Sales
Cost of sales, which includes the estimated cost of Nordstrom Notes that will be issued and
redeemed under our Fashion Rewards program, remained relatively constant at $13 and $25 for the
quarter and six months ended August 1, 2009 compared with $15 and $24 for the quarter and six
months ended August 2, 2008. The slight decrease in cost of sales expense for the second quarter of
2009 compared with the second quarter of 2008 was primarily due to a timing shift in Nordstrom
Fashion Rewards events.
Credit Selling, General and Administrative Expenses
Selling, general and administrative expenses for our Credit segment are made up of operational and
marketing expenses and bad debt. These expenses are summarized in the following table:
Operational and marketing expenses, which are incurred to support and service our credit card
products, remained relatively constant at $25 and $50 for the quarter and six months ended August
1, 2009 compared with $27 and $51 for the quarter and six months ended August 2, 2008. This
reflects expenses that are relatively fixed when compared to portfolio growth and our continued
focus on controlling expenses.
Bad debt expense increased to $52 and $119 for the quarter and six months ended August 1, 2009 from
$30 and $56 for the quarter and six months ended August 2, 2008 due to increased delinquencies and
write-offs reflecting current consumer credit trends, as well as reserves for higher projected
losses inherent in the receivables portfolio as of August 1, 2009.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) The following table illustrates the activity in the allowance for doubtful accounts for the six
months ended August 1, 2009 and August 2, 2008:
1Based upon annualized second quarter bad debt provision.
2Based upon annualized second quarter net write-offs.
We increased our allowance for doubtful accounts by $26 during the first six months of 2009 due to
our expectations around future write-offs for losses inherent in our accounts receivable balance as
of August 1, 2009. During the first quarter of 2009, we experienced an increase in delinquencies,
which are a leading indicator of write-offs. Delinquency rates in the second quarter of 2009
improved slightly compared with the first quarter. Consistent with our first quarter 2009
expectations, we expect our credit selling, general and administrative expenses to increase $35 to
$45 for 2009, due to rising unemployment rates, which we believe lead to higher delinquencies and
ultimately higher write-offs. We continue to take actions to reduce our risk exposure by tightening
underwriting and account management standards. However, additional deterioration in the overall
economic environment, including continued deterioration in the labor market, could cause
delinquencies to increase beyond our current expectations, resulting in additional bad debt
expense.
Total Company Results
Interest Expense, net
Interest expense, net increased by $2 to $36 for the quarter ended August 1, 2009 compared to the
same period in 2008. For the six months ended August 1, 2009, interest expense, net increased $2 to
$67. The increases were driven by higher average debt levels resulting from our $400 debt offering
during the second quarter of 2009, partially offset by the $250 senior notes which matured in
January 2009 and the impact of declining variable interest rates.
Income Tax Expense
Our effective tax rate decreased to 38.2% for the second quarter of 2009, from 39.2% in the same
period of 2008, due to the impact of certain non-taxable investment income in 2009. Our effective
tax rate decreased to 34.7% for the six months ended August 1, 2009 from 39.2% for the same period
in 2008. The rate decrease was primarily due to a benefit of approximately $12 included in our 2009
first quarter results related to the closure of our 2007 federal tax return audit.
Including the impact of these items, we expect our effective tax rate to be between 36.5% and 37.0%
for 2009.
Seasonality
Our business, like that of other retailers, is subject to seasonal fluctuations. Our Anniversary
Sale in July, the holidays in December, and our Half-yearly sales events typically result in higher
sales in the second and fourth quarters of our fiscal years. Accordingly, results for any quarter
are not necessarily indicative of the results that may be achieved for a full fiscal year.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Return on Invested Capital (ROIC) (Non-GAAP financial measure)
We define Return on Invested Capital as follows:
We believe that ROIC is a useful financial measure for investors in evaluating our operating
performance for the periods presented. When read in conjunction with our net earnings and total
assets and compared to return on assets, it provides investors with a useful tool to evaluate our
ongoing operations and our management of assets from period to period. Over the past several years,
we have incorporated ROIC into our key financial metrics, and since 2005 have used it as an
executive incentive measure. Our research has shown historically that overall performance as
measured by ROIC correlates directly to shareholders’ return over the long term. For the 12 fiscal
months ended August 1, 2009, our ROIC decreased to 9.8% compared to 17.4% for the 12 fiscal months
ended August 2, 2008. ROIC is not a measure of financial performance under United States GAAP and
should not be considered a substitute for return on assets, net earnings or total assets as
determined in accordance with GAAP and may not be comparable to similarly titled measures reported
by other companies. See our ROIC reconciliation to GAAP below. The closest GAAP measure is return
on assets, which decreased to 5.5% from 11.4% for the 12 fiscal months ended August 1, 2009
compared to the 12 fiscal months ended August 2, 2008. The following is a reconciliation of return
on assets to ROIC:
1Depreciation based upon estimated asset base of capitalized operating leases as
described in footnote 4 below.
2Based upon the trailing 12-month average.
3Based upon the trailing 12-month average for accounts payable, accrued
salaries, wages and related benefits, and other current liabilities.
4Based upon the trailing 12-month average of the monthly asset base, which is
calculated as the trailing 12 months rent expense multiplied by 8.
Our ROIC declined primarily due to a decrease in our earnings before interest and income taxes
compared to the prior year.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) LIQUIDITY AND CAPITAL RESOURCES
We maintain a level of liquidity sufficient to allow us to cover our seasonal cash needs and to
maintain appropriate levels of short-term borrowings. We believe that our operating cash flows and
available credit facilities are sufficient to finance our cash requirements for the next 12 months.
Over the long term, we manage our cash and capital structure to maximize shareholder return,
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, available credit facilities and potential future borrowings will
be sufficient to fund these scheduled future payments and potential long-term initiatives.
For the six months ended August 1, 2009, cash and cash equivalents increased by $447 to $519.
Activity for the six months ended August 1, 2009 included cash provided by operations of $697,
partially offset by capital expenditures of $196, purchases, net of payments, made by our customers
for third-party merchandise and services using Nordstrom VISA credit cards of $133 and cash
dividends paid of $69. Additionally, we received proceeds from long-term borrowings of $399, of
which a portion was used to repay outstanding issuances of commercial paper.
Operating Activities
The majority of our operating cash inflows are related to sales to our customers, including the
collection of accounts receivable. We also receive cash payments for property incentives from
developers. Our operating cash outflows generally consist of payments to our inventory vendors (net
of vendor allowances), payments to our employees for wages, salaries and other employee benefits,
and payments to our landlords for rent. Operating cash outflows also include payments for income
taxes and interest payments on our short and long-term borrowings.
Net cash provided by operating activities increased by $326 to $697 for the six months ended August
1, 2009 compared to $371 for the same period in 2008. Although net earnings for the first half of
2009 declined compared to the same period in 2008, working capital initiatives and continued lower
expenses resulted in higher cash provided by operating activities. The reduced cash outflows for
merchandise inventories reflected our ongoing efforts to align merchandise inventories with lower
demand. Additionally, lower incentive payouts tied to company performance for 2008, reductions in
expense, and lower payment for income taxes also led to a decrease in operating cash outflows.
Investing Activities
Our investing cash flows typically consist of capital expenditures and customer purchases (net of
payments) for goods and services outside of Nordstrom using the Nordstrom VISA credit cards.
Net cash used in investing activities decreased from $468 for the six months ended August 2, 2008
to $329 for the six months ended August 1, 2009, due to a decrease in capital expenditures for new
stores and remodels, as well as a decrease in third-party purchases (net of payments) using the
Nordstrom VISA credit cards. We opened two full-line stores, relocated one full-line store, and
opened five Rack stores in the first half of 2009, compared to opening four full-line stores for
the same period last year. Although we plan to grow our Rack business by opening eight stores
during the remainder of the year, capital expenditures incurred for Rack stores are significantly
less compared to our full-line stores.
Activity related to customers using their Nordstrom VISA credit cards for merchandise and services
outside of Nordstrom stores decreased to $133 for the six months ended August 1, 2009 compared with
$174 for the six months ended August 2, 2008. The decrease was a result of a general reduction in
consumer spending.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Financing Activities
Net cash provided by financing activities was $79 for the six months ended August 1, 2009 compared
with net cash used in financing activities of $169 for the six months ended August 2, 2008. In
2009, our financing activities consisted of proceeds from long-term borrowings, net, of $399,
partially offset by payments for outstanding issuances of commercial paper of $275 and dividends
paid of $69. Of the $275 in commercial paper issuances outstanding at the beginning of our 2009
fiscal year, we reclassified $140 to long-term debt during the first quarter, as this amount was
repaid with the proceeds of our May 2009 debt issuance. Accordingly, this portion of the commercial
paper repayments is classified as “repayments of commercial
paper classified as long-term” in our condensed consolidated
statement of cash flows for the six months ended August 1, 2009. The remaining $135 in commercial
paper repayments made in 2009 were made using operating cash flows, and are classified as
“repayments of/ proceeds from commercial paper borrowings, net” in our condensed consolidated statement of cash flows.
In 2008, cash used in financing activities included share repurchases of $238 and dividends paid of
$70, partially offset by proceeds from commercial paper of $79.
Short and Long-Term Borrowing Activity
In the second quarter, we issued $400 senior unsecured notes at 6.75% due June 2014. After
deducting the original issue discount, underwriting fees and other expenses of $4, net proceeds
from the offering were $396. A portion of these net proceeds were used to repay $140 in commercial
paper borrowings outstanding at the date of issuance. The remaining proceeds will be used for
general corporate purposes.
Credit Capacity and Commitments
As discussed above, we completed the issuance of $400, 6.75% notes due 2014 during the second
quarter of 2009.
Our next
debt maturity is a $350 securitized note due in April 2010. Beginning in the fourth quarter of 2009, we will make monthly cash
deposits into a restricted account until the note is due in
accordance with the debt agreement. We will continue to monitor the credit markets and our
potential financing needs in order to ensure we have adequate cash on hand to pay this debt when it
becomes due.
On August 14, 2009, we entered into a new unsecured revolving credit facility with a capacity of
$650, which expires in August 2012. The new facility replaced our existing $650 unsecured line of
credit, which was scheduled to expire in November 2010. The new credit facility is available for
working capital, capital expenditures and other general corporate purposes, including as liquidity
support for our commercial paper program. Under the terms of the agreement, we pay a variable rate
of interest and a commitment fee based on our debt rating. Under the new credit facility we have
the option to increase the revolving commitment by up to $100, to a total of $750, provided that we
obtain written consent from the lenders who choose to increase their commitment.
Debt Covenants
Our $300 2007-A VFN, which matures in November 2009, can be cancelled if our debt ratings fall
below Standard and Poor’s BB+ rating or Moody’s Ba1 rating. As of September 9, 2009, our rating by
Standard & Poor’s was BBB+, four grades above the cancellation threshold, and by Moody’s was Baa2,
three grades above the cancellation threshold.
Our $650 unsecured line of credit requires that we maintain a leverage ratio of not greater than
four times Adjusted Debt to EBITDAR, which we were in compliance with as of August 1, 2009. See
additional disclosure of our internal calculation of Adjusted Debt to EBITDAR on the following
page, which generally results in the same ratio as our debt compliance calculation.
Our new revolving credit facility, which replaced our previously existing unsecured line of credit
on August 14, 2009, contains restrictive covenants, including maintaining leverage and fixed charge
coverage ratios. Consistent with our previous unsecured line of credit, the new credit facility
requires that we maintain a leverage ratio of not greater than four times Adjusted Debt to EBITDAR.
The new facility also requires that we maintain a fixed charge coverage ratio of at least two
times, defined as:
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Adjusted Debt to EBITDAR (Non-GAAP financial measure)
We define Adjusted Debt to Earnings before Interest, Income Taxes, Depreciation, Amortization and Rent (“EBITDAR”) as follows:
Adjusted Debt to EBITDAR is one of our key financial metrics, and we believe that our debt
levels are best analyzed using this measure. Our goal today is to manage debt levels at a point
which we believe will help us maintain an investment grade credit rating as well as operate with an
efficient capital structure for our size, growth plans and industry. Investment grade credit
ratings are important to maintaining access to a variety of short-term and long-term sources of
funding, and we rely on these funding sources to continue to grow our business. We believe a higher
ratio, among other factors, could result in rating agency downgrades. In contrast, we believe a
lower ratio would result in a higher cost of capital and could negatively impact shareholder
returns. As of August 1, 2009, our Adjusted Debt to EBITDAR was 3.0 compared to 1.9 as of August 2,
2008. The increase was primarily the result of a decrease in earnings before interest and income
taxes for the 12 months ended August 1, 2009 compared with the 12 months ended August 2, 2008.
Adjusted Debt to EBITDAR is not a measure of financial performance under GAAP and should not be
considered a substitute for debt to net earnings, net earnings or debt as determined in accordance
with GAAP. In addition, Adjusted Debt to EBITDAR does have limitations:
To compensate for these limitations, we analyze Adjusted Debt to EBITDAR in conjunction with other
GAAP financial and performance measures impacting liquidity, including operating cash flows,
capital spending and net earnings. The closest GAAP measure is debt to net earnings, which was 8.1
and 4.0 for the second quarter of 2009 and 2008, respectively. The following is a reconciliation of
debt to net earnings to Adjusted Debt to EBITDAR:
1The components of adjusted debt are as of August 1, 2009 and August 2, 2008,
while the components of EBITDAR are for the 12 months ended August 1, 2009 and August 2, 2008.
2Debt included $79 of commercial paper borrowings outstanding as of August 2,
2008. There were no outstanding commercial paper borrowings as of August 1, 2009.
3The multiple of eight times rent expense used to calculate adjusted debt is our
best estimate of the debt we would record for our leases which are classified as operating if
we had purchased the property.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
(Continued) (Amounts in millions except per share and per square foot amounts) Contractual Obligations
There have been no material changes in our contractual obligations, other than those discussed
below and those which occur in the normal course of business, as specified in Item 303(a)(5) of
Regulation S-K during the quarter ended August 1, 2009. For additional information regarding our
contractual obligations as of January 31, 2009, see Management’s Discussion and Analysis section of
the 2008 Form 10-K.
During the second quarter of 2009, our contractual obligations increased by our required principal
payment on the $400 senior unsecured notes due in June 2014.
CRITICAL ACCOUNTING ESTIMATES
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 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 critical accounting estimates and methodologies in 2009 are consistent
with those discussed in our 2008 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial
Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements — an
amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards
for a noncontrolling interest (minority interest) in a subsidiary, provides guidance on the
accounting for and reporting of the deconsolidation of a subsidiary, and increases transparency
through expanded disclosures. Specifically, SFAS 160 requires the recognition of a minority
interest as equity in the consolidated financial statements and separate from the parent company’s
equity. It also requires consolidated net earnings in the consolidated statement of earnings to
include the amount of net earnings attributable to minority interest. This statement became
effective for Nordstrom as of the beginning of fiscal year 2009 and did not have a material impact
on our consolidated financial statements.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures
About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133
(“SFAS 161”). SFAS 161 expands the disclosure requirements in SFAS 133 about an entity’s derivative
instruments and hedging activities. This statement became effective for Nordstrom as of the
beginning of fiscal year 2009 and did not have a material impact on our consolidated financial
statements.
In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB 28-1, Disclosures about Fair
Value of Financial Instruments (“FSP FAS 107-1 and APB 28-1”). FSP FAS 107-1 and APB 28-1, which
requires disclosure about the fair value of financial instruments in interim financial statements
as well as in annual financial statements, is effective for interim periods ending after June 15,
2009, but early adoption is permitted for interim periods ending after March 15, 2009. We have
adopted this guidance and have included the required disclosures in this Form 10-Q for the quarter
ended August 1, 2009. This FSP has not impacted our consolidated financial position or results of
operations, as its requirements are disclosure-only in nature.
In May 2009, the FASB issued Statement of Accounting Standards No. 165, Subsequent Events (“SFAS
165”), which establishes general standards of accounting and disclosure for events that occur after
the balance sheet date but before financial statements are issued. This standard is effective for
reporting periods ending after June 15, 2009. We have included the required disclosures in this
Form 10-Q for the quarter ended August 1, 2009. SFAS 165 did not impact our consolidated financial
position or results of operations, as its requirements are disclosure-only in nature.
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, The FASB
Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting
Principles, a replacement of FASB Statement No. 162 (“SFAS 168”) which establishes the FASB
Accounting Standards Codification as the source of authoritative U.S. generally accepted accounting
principles (GAAP) (other than guidance issued by the SEC) to be used in the preparation of
financial statements. SFAS 168 is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The provisions of SFAS 168 will be applied prospectively
beginning in our third quarter of 2009 and the impact on our consolidated financial statements will
be disclosure-only in nature.
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We discussed our interest rate risk and our foreign currency exchange risk in Part II, “Item 7A.
Quantitative and Qualitative Disclosures About Market Risk” in our 2008 Annual Report on Form 10-K.
There have been no material changes to these risks since that time.
As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company performed an
evaluation under the supervision and with the participation of management, including our President
and Chief Financial Officer, of the design and effectiveness 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 Chief Financial Officer
concluded that, as of the end of the period covered by this Quarterly Report, our disclosure
controls and procedures were effective in the timely and accurate recording, processing,
summarizing and reporting of material financial and non-financial information within the time
periods specified within the Commission’s rules and forms. Our President and Chief Financial
Officer also concluded that our disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports that we file or submit under the Exchange Act
is accumulated and communicated to our management, including our President and Chief Financial
Officer, to allow timely decisions regarding required disclosure.
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.
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PART II - OTHER INFORMATION
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should
carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2008 Annual
Report on Form 10-K. We are updating our risk factors to include the following:
Regulatory Environment and Financial System Reforms
Current economic conditions, particularly in the financial markets, have resulted in increased
legislative and regulatory actions.
Our wholly owned federal savings bank, Nordstrom fsb, offers our private label card, two Nordstrom
VISA cards and debit cards for Nordstrom purchases, through which our Credit segment generates
income. On June 17, 2009, the Obama Administration released its white paper for reform of the
financial system. Proposed reforms which could materially affect our company include the
elimination of the ability of our bank subsidiary to be owned by us and increased supervision and
regulation of financial firms. The administration’s plan proposes legislation and an
implementation time-frame over 3 to 5 years. Due to the complexity and controversial nature of
those proposed reforms, modifications are likely and the final legislation, if any, may differ
significantly from the administration’s current proposal. If the currently proposed reforms were
adopted, we would no longer be allowed to own our bank subsidiary, in which event alternatives
would be explored and pursued as appropriate. Any such forced divestiture may materially adversely
affect our business and results of operations. Additionally, compliance with potential increased
regulation and scrutiny by multiple state and federal agencies may reduce our revenue and increase
expenses, which would negatively impact our business.
(c) Repurchases
(Dollar and share amounts in millions, except per share amounts)
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Item 4. Submission of Matters to a Vote of Security Holders. (amounts in millions)
We held our Annual Shareholders Meeting on May 19, 2009 at which time our shareholders elected nine
directors for the term of one year, ratified the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm, and approved the Executive Management Bonus Plan.
The results of the voting were as follows:
(1) Election of Directors
There were no broker non-votes.
(2) Ratification of the Appointment of Independent Registered Public Accounting Firm
The results of the vote included 170.5 for, 1.1 against, and 0.3 abstentions. There were no
broker non-votes.
(3) Approval of the Executive Management Bonus Plan
The results of the vote included 166.2 for, 4.3 against, and 1.4 abstentions. There were no
broker non-votes.
Item 6. Exhibits.
Exhibits are incorporated herein by reference or are filed or furnished with this report as set
forth in the Index to Exhibits on page 31 hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NORDSTROM, INC. AND SUBSIDIARIES
Exhibit Index
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