##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K (Mark One) [X]
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE ACT OF 1934
 For the fiscal year ended January 31, 2004 OR [  ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE ACT OF 1934
 For the transition period from _______ to _______ Commission file number 0-12994 Nordstrom Credit, Inc.  Colorado
    
    91-1181301(State or other jurisdiction of
incorporation or organization)
    
    (IRS employer
Identification No.)
 13531 East Caley, Centennial, Colorado
    
    80111(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: 303-397-4700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.50 par value
(Title of each class) Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES[X]
NO [  ] Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [   ] Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [  ] NO
[X] On February 29, 2004 we had 10,000 shares of common stock ($.50 par value)
outstanding; all such shares are owned by our parent, Nordstrom, Inc. The Registrant meets the conditions set forth in General Instruction
I(1)(a) and (b) of Form 10-K and are therefore filing this Form with the
reduced disclosure format. 1 of 26




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TABLE OF CONTENTS PagePART IItem 1. Business.
    
    
    3Item 2. Properties.
    
    
    3Item 3. Legal Proceedings.
    
    
    3Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    3PART IIItem 5. Market for Registrants Common Equity and Related Stockholder Matters.
    
    
    3Item 6. Selected Financial Data.
    
    
    3Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operation.
    
    
    3Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
    
    
    4Item 8. Financial Statements and Supplementary Data.
    
    
    5Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
    
    
    5Item 9A. Controls and Procedures.
    
    
    5PART IIIItem 10. Directors and Executive Officers of the Registrant.
    
    
    6Item 11. Executive Compensation.
    
    
    6Item 12. Security Ownership of Certain Beneficial Owners and Management.
    
    
    6Item 13. Certain Relationships and Related Transactions.
    
    
    6Item 14. Principal Accountant Fees and Services
    
    
    6PART IVItem 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
    
    
    7SIGNATURES
    
    
    12FINANCIAL STATEMENTS
    
    
    15EXHIBIT 10.25EXHIBIT 10.28EXHIBIT 12.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  2 of 26




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##### Table of Contents



PART I 
 Item 1. Business. The information required under this item is included in Note 1 to the Financial
Statements on page 18 of this report, which is incorporated herein by
reference. 
 Item 2. Properties. We lease an office building
in Centennial, Colorado where our principal offices
are located. 
 Item 3. Legal Proceedings. We are not a party to any material legal proceedings. 
 Item 4. Submission of Matters to a Vote of Security Holders. Not required under reduced disclosure format. 
 PART II 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters. The class of securities registered is our common stock, $.50 par value per
share. There are 100,000 shares of authorized common stock, of which 10,000
shares were issued and outstanding as of February 29, 2004. Our common stock is
owned entirely by our parent, Nordstrom, Inc. (Nordstrom). The stock has not
been traded and, accordingly, no market value has been established. No
dividends were paid in the fiscal years ended January 31, 2004 and 2003. 
 Item 6. Selected Financial Data. Not required under reduced disclosure format. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations. We earn service charge income on our accounts receivable. Service charge income
decreased modestly in 2003, as compared to 2002, primarily due to a decrease in
the average accounts receivable balances. Accounts receivable have declined
approximately 3% over the past year due to lower sales on our private label
cards. Other fees and charges consist primarily of late fees. Other fees and charges
decreased in 2003 as compared to 2002 primarily due to a decrease in late fee
income, caused by a decline in the number of accounts being assessed a late
fee, as well as a general decline in the outstanding balances of the retail card portfolio. Late fee income
was $7.4 and $8.8 million in 2003 and 2002. The decrease is also due in part to
income received in the prior year from the VISA securitization master trust
certificates. These certificates were repaid during the second quarter of 2002. 3 of 26




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Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations (Cont.) Rental income from affiliates and other decreased in 2003 compared to 2002 due
to the sale of our Credit facility in January 2003. Current year rental income
consists primarily of the amortized portion of the deferred gain on sale of the
facility. Net interest expense decreased in 2003 as compared to 2002 as a result of a
decrease in interest rates and long-term debt outstanding, partially offset by
an increase in short-term debt outstanding. Servicing and marketing fees paid to Nordstrom fsb (the Bank) for servicing
our receivables were essentially flat in 2003 as compared to 2002,
because of an increase in the first quarter due to a change in our method of accruing
 marketing expenses offset by subsequent decreases in servicing and marketing fees the rest of the year. The
servicing fees decreased due to a decline in our retail card portfolio.
Marketing fees also declined as promotion costs associated with opening new private
label accounts declined. Selling, general and administrative expenses decreased in 2003 as compared to
2002 primarily due to a change in our expense structure. Effective during the
second quarter of 2002, expenses related to returned checks are now charged to
Nordstrom, Inc. The decrease is also attributable to lower buying and occupancy
expenses resulting from the sale of our Credit facility in January 2003,
partially offset by higher maintenance and utilities. Certain other information required under this item is included in Notes 1, 2
and 6 to the Financial Statements on pages 19, 20 and 22 of this report, which is
incorporated by reference. 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risk from changes in interest rates. In seeking to
minimize risk, we manage exposure through our regular operating and financing
activities. We do not use financial instruments for trading or other
speculative purposes and are not party to any leveraged financial instruments. We manage interest rate exposure through our mix of fixed and variable rate
borrowings which finance customer accounts receivable. Short-term borrowings
generally bear interest at variable rates but, because they have maturities of
three months or less, we believe that the risk of material loss is low. 4 of 26




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk (Cont.) The table below presents principal amounts and related weighted average
interest rates by year of maturity. All items described in the table are
non-trading and are stated in U.S. dollars. Total at
    
    Fair valueJanuary 31,
    
    January 31,Dollars in thousands
    
    2004
    
    2005
    
    2006
    
    2004
    
    2004Interest Rate RiskAssetsCustomer accounts receivable
    
    $
    596,112
    
    
    
    
    
    
    
    
    
    
    $
    596,112
    
    
    $
    596,112Variable interest rate*
    
    
    19.4
    %
    
    
    
    
    
    
    
    
    
    
    19.4
    %Note receivable from
Nordstrom fsb
    
    $
    205,435
    
    
    
    
    
    
    
    
    
    
    $
    205,435
    
    
    $
    205,435Year end Interest rate
    
    
    1.2
    %
    
    
    
    
    
    
    
    
    
    
    1.2
    %LiabilitiesNote payable to
Nordstrom, Inc.
    
    $
    118,850
    
    
    
    
    
    
    
    
    
    
    $
    118,850
    
    
    $
    118,850Year end Interest rate
    
    
    1.2
    %
    
    
    
    
    
    
    
    
    
    
    1.2
    %Long-term debt
    
    
    
    
    
    $
    97,500
    
    
    $
    300,000
    
    
    $
    397,500
    
    
    $
    419,238Fixed average interest rate
    
    
    
    
    
    
    6.7
    %
    
    
    4.8
    %
    
    
    5.3
    %
 * This is our weighted average interest rate on customer accounts receivable,
which is a combination of fixed rates and floating rates based on prime. The
actual effective interest rate is lower due to accounts which are paid off
within 30 days and defaults. 
 Item 8. Financial Statements and Supplementary Data. (a) Financial Statements and Supplementary Data   The ratio of earnings available for fixed charges to fixed charges is
4.26, 4.17, and 1.94 for 2003, 2002, and 2001. (b) Other Financial Statements and Schedule The schedule required under Regulation S-X is filed pursuant to Item 15
of this report. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. None 
 Item 9A. Controls and Procedures. As of the end of the period covered by this Annual Report on Form 10-K, we
performed an evaluation under the supervision and with the participation of
management, including our President and Vice President and Treasurer, 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 Vice President and Treasurer concluded
that, as of the end of the period covered by this Annual Report on
Form 10-K, our disclosure
controls and procedures are effective in the timely recording, processing,
summarizing and reporting of material financial and non-financial information. 5 of 26




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Item 9A. Controls and Procedures (Cont.) There have been no changes 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 have materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting. 
 PART III 
 Item 10. Directors and Executive Officers of the Registrant. Not required under reduced disclosure format. 
 Item 11. Executive Compensation. Not required under reduced disclosure format. 
 Item 12. Security Ownership of Certain Beneficial Owners and Management. Not required under reduced disclosure format. 
 Item 13. Certain Relationships and Related Transactions. Not required under reduced disclosure format. 
 Item 14. Principal Accountant Fees and Services We paid the following fees to our principal accounting firm Deloitte & Touche
LLP (Deloitte) for the fiscal years ended January 31, 2004 and 2003: Fiscal Year Ended January 31
    
    2004
    
    2003Audit Fees
    
    $
    37,400
    
    
    $
    36,000Audit-Related Fees
    
    $
    [0]
    
    
    $
    [0]Tax Fees
    
    $
    [0]
    
    
    $
    [0]All Other Fees
    
    $
    [0]
    
    
    $
    [0]$
    37,400
    
    
    $
    36,000
 Audit fees primarily include services for verifying the financial statements
along with reviews of our interim financial information and Forms 10-K and
10-Q. Deloittes work on this audit was performed by full time, permanent
employees and partners of Deloitte. In considering the nature of the services provided by Deloitte, Nordstrom,
Inc.s Audit Committee (the Audit Committee), which functions as our audit
committee, determined that such services are compatible with the provision of
independent audit services. The Audit Committee discussed these services with
Deloitte and management to determine that they are permitted under the rules
and regulations concerning auditor independence promulgated by the U.S.
Securities and Exchange Commission (the SEC) to implement the Sarbanes-Oxley
Act of 2002, as well as the American Institute of Certified Public Accountants. 6 of 26




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Item 14. Principal Accountant Fees and Services (Cont.)

The services performed by Deloitte in fiscal year ended January 31, 2004 were
pre-approved in accordance with the pre-approval policy and procedures adopted
by the Audit Committee on April 1, 2003. Normally, pre-approval is provided at
regularly scheduled Audit Committee meetings. However, the authority to grant
specific pre-approval between meetings, as necessary, has been delegated to the
Chairman of the Audit Committee. The Chairman must update the Audit Committee
at the next regularly scheduled meeting of any services that were granted
specific pre-approval.

The Audit Committee also reviews, at each of its regularly scheduled meetings:



| |  | A listing of approved services since its last review;                                                                          
|- |  | -------------------------------------------------------------------------------------------------------------------------------
| |  | A report summarizing the year-to-date services provided by the
independent auditor, including fees paid for those services; and
| |  | A projection for the current fiscal year of estimated fees.                                                                    

In addition the policy prohibits us from engaging the independent auditors for
services billed on a contingent fee basis.




PART IV




Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.



| |  | (a)1. Financial Statements
The following consolidated financial statements of the Company and the
Independent Auditors Report are incorporated by reference in Part II,
Item 8:
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Independent Auditors Report
Consolidated Statements of Earnings
Consolidated Balance Sheets
Consolidated Statements of Investment of Nordstrom, Inc.
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements



| |  | (a)2. Financial Statement Schedules
The financial statement schedule listed in the Index to Consolidated
Financial Statements and Schedule on page 13 of this report is
incorporated herein by reference.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)3. Exhibits  (3.1)
    
    Articles of Incorporation of the Registrant are hereby incorporated by
reference from the Registrants Form 10-K for the year ended January 31, 1991,
Exhibit 3.1.(3.2)
    
    By-laws of the Registrant, as amended and restated on May 19, 1998 are
hereby incorporated by reference from the Registrants Form 10-K for the
year ended January 31, 2003, Exhibit 3.2.(10.1)
    
    Investment Agreement dated October 8, 1984 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the Registrants Form
10, Exhibit 10.1. 7 of 26




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(a)3. Exhibits (Continued)  (10.2)
    
    Operating Agreement dated August 30, 1991 between Registrant and
Nordstrom National Credit Bank is hereby incorporated by reference from the
Registrants Form 10-Q for the quarter ended July 31, 1991, Exhibit 10.1, as
amended.(10.3)
    
    First Amendment to the Operating Agreement dated August 30, 1991
between Registrant and Nordstrom National Credit Bank, dated March 1, 2000 is
hereby incorporated by reference from the Registrants Form 10-K for the year
ended January 31, 2001, Exhibit 10.3.(10.4)
    
    Second Amendment to the Operating Agreement dated August 30, 1991
between Registrant and Nordstrom National Credit Bank, dated October 1, 2001
is hereby incorporated by reference from the Registrants Form 10-K for the
year ended January 31, 2002, Exhibit 10.4.(10.5)
    
    Corporate Services Agreement dated February 1, 2001 between
Registrant and Nordstrom federal savings bank (fsb) is hereby
incorporated by reference from the Registrants Form 10-K for the year
ended January 31, 2001, Exhibit 10.4.(10.6)
    
    First Amendment to the Corporate Services Agreement dated February 1,
2001 between Registrant and Nordstrom fsb, dated February 1, 2001 is hereby
incorporated by reference from the Registrants Form 10-K for the year ended
January 31, 2003, Exhibit 10.6.(10.7)
    
    Second Amendment to the Corporate Services Agreement dated February 1,
2001 between Registrant and Nordstrom fsb, dated February 1, 2002 is hereby
incorporated by reference from the Registrants Form 10-K for the year ended
January 31, 2003, Exhibit 10.7.(10.8)
    
    Series 1996-A Supplement to Master Pooling and Servicing Agreement dated
August 14, 1996 between Registrant, Nordstrom National Credit Bank, and Norwest
Bank Colorado, N.A., as trustee, is incorporated by reference from the
Registrants Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.3.(10.9)
    
    Amendment to the Series 1996-A Supplement to Master Pooling and
Servicing Agreement dated August 14, 1996 between Registrant, Nordstrom
National Credit Bank and Norwest Bank Colorado, N.A., as trustee, dated
December 10, 1997, is hereby incorporated by reference from the Registrants
Form 10-K for the year ended January 31, 1998, Exhibit 10.13.(10.10)
    
    Second Amendment to the Series 1996-A Supplement to Master Pooling and
Servicing Agreement dated August 14, 1996 between Registrant, Nordstrom
National Credit Bank and Norwest Bank Colorado, N.A., as trustee, dated
February 28, 1999, is hereby incorporated by reference from the Registrants
Form 10-Q for the quarter ended April 30, 1999, Exhibit 10.1.(10.11)
    
    Third Amendment to the Series 1996-A Supplement to Master Pooling and
Servicing Agreement dated August 14, 1996 between Registrant, Nordstrom
National Credit Bank and Norwest Bank Colorado, N.A., as trustee, dated
October 1, 2001 is hereby incorporated by reference from the Registrants Form
10-K for the year ended January 31, 2002, Exhibit 10.11. 8 of 26




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(a)3. Exhibits (Continued)  (10.12)
    
    Business Account Operating Agreement dated February 1, 1997 between
Registrant and Nordstrom, Inc. is hereby incorporated by reference from the
Registrants Form 10-K for the year ended January 31, 2002, Exhibit 10.16.(10.13)
    
    Amendment to the Business Account Operating Agreement dated February 1,
1997 between Registrant and Nordstrom, Inc., dated October 1, 2001 is hereby
incorporated by reference from the Registrants Form 10-K for the year ended
January 31, 2002, Exhibit 10.17.(10.14)
    
    Second Amendment to the Business Account Operating Agreement dated
February 1, 1997 between Registrant and Nordstrom, Inc., dated November 30,
2001 is hereby incorporated by reference from the Registrants Form 10-K for
the year ended January 31, 2002, Exhibit 10.18.(10.15)
    
    Recourse Agreement dated March 1, 2001 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the Registrants
Form 10-K for the year ended January 31, 2002, Exhibit 10.19.(10.16)
    
    Amendment to the Recourse Agreement dated March 1, 2001 between
Registrant and Nordstrom, Inc., dated October 1, 2001 is hereby
incorporated by reference from the Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.20.(10.17)
    
    Receivables Purchase Agreement dated October 1, 2001 between
Registrant and Nordstrom Private Label Receivables, LLC is hereby incorporated
by reference from the Registrants Form 10-K for the year ended January 31,
2002, Exhibit 10.21.(10.18)
    
    Transfer and Servicing Agreement dated October 1, 2001 between
Nordstrom Private Label Receivables, LLC, Nordstrom fsb, Wells Fargo Bank
Minnesota, N.A., and Nordstrom Private Label Credit Card Master Note Trust is
hereby incorporated by reference from the Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.22.(10.19)
    
    Master Indenture dated October 1, 2001 between Nordstrom Private
Label Credit Card Master Note Trust and Wells Fargo Bank Minnesota, N.A., as
trustee, is hereby incorporated by reference from the Registrants Form 10-K
for the year ended January 31, 2002, Exhibit 10.23.(10.20)
    
    Series 2001-1 Indenture Supplement dated October 1, 2001 between
Nordstrom Private Label Credit Card Master Note Trust and Wells Fargo Bank
Minnesota, N.A., as trustee, is hereby incorporated by reference from the
Registrants Form 10-K for the year ended January 31, 2002, Exhibit 10.24.(10.21)
    
    Series 2001-2 Indenture Supplement dated December 4, 2001 between
Nordstrom Private Label Credit Card Master Note Trust and Wells Fargo Bank
Minnesota, N.A., as trustee, is hereby incorporated by reference from the
Registrants Form 10-K for the year ended January 31, 2002, Exhibit 10.25.(10.22)
    
    Amended and Restated Trust Agreement dated October 1, 2001 between
Nordstrom Private Label Receivables, LLC, and Wilmington Trust Company, as
trustee, is hereby incorporated by reference from the Registrants Form 10-K
for the year ended January 31, 2002, Exhibit 10.26. 9 of 26




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(a)3. Exhibits (Continued)  (10.23)
    
    Note Purchase Agreement dated December 4, 2001 between Nordstrom
Private Label Receivables, LLC, Nordstrom fsb, Falcon Asset Securitization
Corporation, and Bank One, NA, as agent, is hereby incorporated by reference
from the Registrants Form 10-K for the year ended January 31, 2003, Exhibit
10.25.(10.24)
    
    First Amendment to the Note Purchase Agreement dated December 4, 2001
between Nordstrom Private Label Receivables, LLC, Nordstrom fsb, Falcon Asset
Securitization Corporation, and Bank One, NA, as agent, dated December 2,
2002 is hereby incorporated by reference from the Registrants Form 10-K for
the year ended January 31, 2003, Exhibit 10.26.(10.25)
    
    Second Amendment to the Note Purchase Agreement dated December 4,
2001 between Nordstrom Private Label Receivables, LLC, Nordstrom fsb, Falcon
Asset Securitization Corporation, and Bank One, NA, as agent, dated December
2, 2003 is filed herein as an Exhibit.(10.26)
    
    Loan agreement dated February 1, 2002 between Nordstrom, Inc. and
Registrant is hereby incorporated by reference from the Registrants Form 10-Q
for the quarter ended April 30, 2002, Exhibit 10.1.(10.27)
    
    Loan agreement dated February 1, 2002, between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the Registrants Form
10-Q for the quarter ended April 30, 2002, Exhibit 10.2.(10.28)
    
    Master Note Agreement dated November 1, 2003, between Nordstrom fsb
and Registrant is filed herein as an Exhibit.(10.29)
    
    Purchase and Sale Agreement dated December 16, 2002 between Registrant
and Nudo-Weiner Associates, LLC is hereby incorporated by reference from the
Registrants Form 10-K for the year ended January 31, 2003, Exhibit 10.30.(10.30)
    
    First Amendment to the Purchase and Sale Agreement dated December 16,
2002 between Registrant and Nudo-Weiner Associates, LLC, dated December 19,
2002 is hereby incorporated by reference from the Registrants Form 10-K for
the year ended January 31, 2003, Exhibit 10.31.(12.1)
    
    Computation of Ratio of Earnings Available for Fixed Charges to Fixed
Charges is filed herein as an Exhibit.(23.1)
    
    Independent Auditors Consent is filed herein as an Exhibit.(31.1)
    
    Certification of President required by Section 302(a) of the
Sarbanes-Oxley Act of 2002.(31.2)
    
    Certification of Vice President and Treasurer required by Section
302(a) of the Sarbanes-Oxley Act of 2002.(32.1)
    
    Certification of President regarding annual report containing
financial statements as required by Section 906 of the Sarbanes-Oxley Act
of 2002.(32.2)
    
    Certification of Vice President and Treasurer regarding annual report
containing financial statements as required by Section 906 of the
Sarbanes-Oxley Act of 2002. 10 of 26




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(a)3. Exhibits (Continued)

All other exhibits are omitted because they are not applicable, or not
required, or because the required information is included in the financial
statements or notes thereto.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of the period for
which this report is filed.

11 of 26



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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. NORDSTROM CREDIT, INC.(Registrant)Date: March 30, 2004
    
    /s/

    Michael G. KoppelMichael G. KoppelVice President and Treasurer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated. /s/
    
    Kevin T. Knight
    
    /s/
    
    Blake W. NordstromKevin T. Knight
    
    
    
    Blake W. NordstromDirector and President
    
    
    
    Director(Principal Executive Officer)/s/
    
    Michael G. Koppel
    
    /s/
    
    Marc A. AnackerMichael G. Koppel
    
    
    
    Marc A. AnackerVice President and Treasurer
    
    
    
    Director(Principal Accounting and Financial Officer)Date: March 30, 2004
 12 of 26




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Nordstrom Credit, Inc. and Subsidiary 
 Index To Consolidated Financial Statements and Schedule
 PageNumberIndependent Auditors Report
    
    
    14Consolidated Statements of Earnings
    
    
    15Consolidated Balance Sheets
    
    
    16Consolidated Statements of Investment of Nordstrom, Inc.
    
    
    17Consolidated Statements of Cash Flows
    
    
    18Notes to Consolidated Financial Statements
    
    
    19Additional financial information required to be furnished -Financial Statement Schedule:Schedule II - Valuation and Qualifying Accounts
    
    
    26
 All other schedules have been omitted because they are inapplicable, not
required or the information is included elsewhere in the financial statements
or notes thereto. 13 of 26




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INDEPENDENT AUDITORS REPORT Board of Directors
Nordstrom Credit, Inc.
Centennial, Colorado We have audited the accompanying consolidated balance sheets of Nordstrom
Credit, Inc. and subsidiary (the Company) as of January 31, 2004 and 2003,
and the related consolidated statements of earnings, investment of Nordstrom,
Inc. and cash flows for each of the three years in the period ended January 31,
2004. Our audits also included the financial statement schedule listed in the
accompanying Index to Consolidated Financial Statements and Schedule. These
financial statements and the financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule based on
our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of Nordstrom Credit,
Inc. and subsidiary as of January 31, 2004 and 2003, and the results of their
operations and their cash flows for each of the three years in the period ended
January 31, 2004, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the
information set forth therein. /s/Deloitte & Touche LLP
Seattle, Washington
March 26, 2004 14 of 26




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Nordstrom Credit, Inc. and Subsidiary
Consolidated Statements of Earnings
(Dollars in thousands) Year Ended January 31,
    
    2004
    
    2003
    
    2002Revenue:Service charge income
    
    $
    97,840
    
    
    $
    101,331
    
    
    $
    101,742Other fees and charges
    
    
    8,589
    
    
    
    10,985
    
    
    
    4,355Rental income from affiliates and other
    
    
    1,132
    
    
    
    1,700
    
    
    
    2,041Total revenue
    
    
    107,561
    
    
    
    114,016
    
    
    
    108,138Expenses:Interest, net
    
    
    20,113
    
    
    
    22,691
    
    
    
    24,707Servicing and marketing fees paid to
Nordstrom fsb
    
    
    14,523
    
    
    
    14,684
    
    
    
    32,496Selling, general and administrative
    
    
    1,187
    
    
    
    1,335
    
    
    
    27,506Total expenses
    
    
    35,823
    
    
    
    38,710
    
    
    
    84,709Earnings before income taxes
    
    
    71,738
    
    
    
    75,306
    
    
    
    23,429Income taxes
    
    
    26,184
    
    
    
    27,487
    
    
    
    8,700Net earnings
    
    $
    45,554
    
    
    $
    47,819
    
    
    $
    14,729Ratio of earnings available for fixed charges
to fixed charges
    
    
    4.26
    
    
    
    4.17
    
    
    
    1.94
 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 15 of 26




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Nordstrom Credit, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands) January 31,
    
    2004
    
    2003ASSETSCash and cash equivalents
    
    $
    338
    
    
    $
    370Customer accounts receivable, net of allowance for doubtful
accounts of $20,320 and $22,385
    
    
    575,792
    
    
    
    594,450Receivable from affiliates and other receivables, net
    
    
    27,581
    
    
    
    29,936Notes receivable from affiliates
    
    
    205,435
    
    
    
    84,395Land, buildings and equipment, net
    
    
    279
    
    
    
    264Deferred taxes and other assets
    
    
    7,554
    
    
    
    8,701$
    816,979
    
    
    $
    718,116LIABILITIES AND INVESTMENT OF NORDSTROMPayable to affiliates, net
    
    $
    8,921
    
    
    $
    1,601Note payable to Nordstrom, Inc.
    
    
    118,850
    
    
    
    74,460Accrued interest, taxes and other
    
    
    6,546
    
    
    
    1,482Long-term debt
    
    
    397,500
    
    
    
    400,000Other liabilities
    
    
    14,905
    
    
    
    15,870Total liabilities
    
    
    546,722
    
    
    
    493,413Investment of Nordstrom, Inc.
    
    
    270,257
    
    
    
    224,703$
    816,979
    
    
    $
    718,116
 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 16 of 26




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Nordstrom Credit, Inc. and Subsidiary
Consolidated Statements of Investment of Nordstrom, Inc.
(Dollars in thousands except per share amounts) Common Stock, $.50 par value,100,000 shares authorizedRetainedShares
    
    Amount
    
    Earnings
    
    TotalBalance at January 31, 2001
    
    
    10,000
    
    
    $
    55,058
    
    
    $
    107,097
    
    
    $
    162,155Net earnings
    
    
    
    
    
    
    
    
    
    
    14,729
    
    
    
    14,729Balance at January 31, 2002
    
    
    10,000
    
    
    $
    55,058
    
    
    
    121,826
    
    
    
    176,884Net earnings
    
    
    
    
    
    
    
    
    
    
    47,819
    
    
    
    47,819Balance at January 31, 2003
    
    
    10,000
    
    
    $
    55,058
    
    
    
    169,645
    
    
    
    224,703Net earnings
    
    
    
    
    
    
    
    
    
    
    45,554
    
    
    
    45,554Balance at January 31, 2004
    
    
    10,000
    
    
    $
    55,058
    
    
    $
    215,199
    
    
    $
    270,257
 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 17 of 26




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Nordstrom Credit, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Dollars in thousands) Year Ended January 31,
    
    2004
    
    2003
    
    2002Operating Activities:Net earnings
    
    $
    45,554
    
    
    $
    47,819
    
    
    $
    14,729Adjustments to reconcile net earnings to net cash
provided by operating activities:Depreciation and amortization
    
    
    116
    
    
    
    425
    
    
    
    875Change in:Receivable from affiliates and
other receivables, net
    
    
    2,355
    
    
    
    (16,036
    )
    
    
    (929
    )Notes receivable from affiliates
    
    
    (121,040
    )
    
    
    (46,300
    )
    
    
    (38,095
    )Deferred taxes and other assets
    
    
    1,046
    
    
    
    (6,517
    )
    
    
    (1,931
    )Payable to affiliates, net
    
    
    7,320
    
    
    
    (18,663
    )
    
    
    19,850Accrued interest, taxes and other
    
    
    5,064
    
    
    
    (6,085
    )
    
    
    (4,486
    )Other liabilities
    
    
    (965
    )
    
    
    (49
    )
    
    
    Net cash used in operating activities
    
    
    (60,550
    )
    
    
    (45,406
    )
    
    
    (9,987
    )Investing Activities:Decrease in customer accounts
receivable, net
    
    
    18,658
    
    
    
    23,645
    
    
    
    27,029(Additions) retirements to property and
equipment, net
    
    
    (30
    )
    
    
    1,053
    
    
    
    (1,396
    )Proceeds from sale-leaseback of Denver Credit
facility, net
    
    
    
    
    
    
    20,000
    
    
    
    Net cash provided by investing activities
    
    
    18,628
    
    
    
    44,698
    
    
    
    25,633Financing Activities:Borrowings (repayments) under note payable
to Nordstrom, net
    
    
    44,390
    
    
    
    74,460
    
    
    
    (301,430
    )Principal payments on long-term debt
    
    
    (2,500
    )
    
    
    (76,750
    )
    
    
    (11,000
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    300,000Net cash provided by (used in) financing activities
    
    
    41,890
    
    
    
    (2,290
    )
    
    
    (12,430
    )Net (decrease) increase in cash and cash equivalents
    
    
    (32
    )
    
    
    (2,998
    )
    
    
    3,216Cash and cash equivalents at beginning of year
    
    
    370
    
    
    
    3,368
    
    
    
    152Cash and cash equivalents at end of year
    
    $
    338
    
    
    $
    370
    
    
    $
    3,368
 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 18 of 26




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Nordstrom Credit, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(Dollars in thousands) Note 1 - Description Of Business We are a wholly-owned subsidiary of Nordstrom, Inc. (Nordstrom) incorporated
in the state of Washington in 1982 and reincorporated in the state of Colorado
in 1990. Our primary business is to finance customer accounts receivables
generated under revolving charge accounts through sales of merchandise in
Nordstrom stores (Accounts). The Accounts originate through the use of credit
cards issued by Nordstrom fsb, (the Bank) a federal savings association
organized as a wholly-owned subsidiary of Nordstrom. The Bank was formerly
known as Nordstrom National Credit Bank, a national banking association
organized on August 30, 1991. The credit segment disclosed in the Nordstrom,
Inc. financial statements includes our financial information as well as the
Banks financial information. Under an operating agreement dated August 30, 1991, as amended on March 1, 2000
and October 1, 2001 (the Operating Agreement), we purchase Accounts from the
Bank for a price equal to the amount of Accounts originated. The Bank performs
the servicing functions for the Accounts. Until October 2001, we paid the Bank
a servicing fee of 2.3% of sales generated from these Accounts. Effective
November 2001, we pay a servicing fee of 2% to the Bank based on average
accounts receivable balances. We also pay a monthly marketing fee to the Bank
for its marketing efforts to increase customer accounts receivable balances
upon which we earn service charge income. On October 1, 2001, we established a wholly-owned subsidiary, Nordstrom Private
Label Receivables LLC (NPLR) in connection with the issuance of the $300
million receivable-backed securities supported by our private label
receivables. We sell substantially all of the private label receivables to
NPLR. The receivables sold to NPLR are then pledged to Wilmington Trust, the
Owner Trustee, who issues certificates that are backed by the receivables. In the first quarter of 2000, we implemented a customer loyalty program for the
Nordstrom private label credit card. Customers earn reward points based on
their spending habits. Upon the accumulation of a specified number of points,
the customer is given a merchandise certificate to be redeemed at any Nordstrom
store. When the merchandise certificate is issued, Nordstrom assumes the
liability. Through January 31, 2002, we recorded the expense as the reward
points were earned. Effective February 1, 2002, the reward points are expensed
by Nordstrom, Inc. We have an investment agreement with Nordstrom (the Investment Agreement)
dated October 8, 1984, which, among other things, governs ownership of our
stock and the financial relationships between us. The Investment Agreement
requires that Nordstrom maintain our ratio of earnings available for fixed
charges to fixed charges at not less than 1.25:1 and further requires that
Nordstrom retain ownership of all of our outstanding shares of stock. This
agreement does not, however, represent a guarantee by
Nordstrom of payment for any of our obligations. Note 2  Summary Of Significant Accounting Policies Basis of Presentation: The consolidated financial statements include the
balances of Nordstrom Credit, Inc. and Nordstrom Private Label Receivables LLC.
We eliminate all significant intercompany transactions and balances in
consolidation. 19 of 26




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Note 2  Summary Of Significant Accounting Policies (Cont.) Use of Estimates: We make estimates and assumptions that affect the reported
amounts in the financial statements and accompanying notes. Actual results
could differ from those estimates. Reclassifications: Certain reclassifications of prior year balances have been
made for consistent presentation with the current year. Cash Equivalents: Cash equivalents represent short-term investments with a
maturity of three months or less from the time of purchase. Asset Impairment: We review our long-lived assets annually for impairment or
when events or changes in circumstances indicate the carrying value of these
assets may not be recoverable. Fair Value of Financial Instruments: The carrying amount of cash equivalents,
customer accounts receivable, notes receivable and notes payable approximate
fair value because of the short maturity of these instruments. The fair value
of long-term debt (including current maturities), using quoted market prices
of the same or similar issues with the same remaining term to maturity, is
approximately $419,200 and $435,100 at January 31, 2004 and 2003. Recent Accounting Pronouncements: In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities for certain
decisions made by the FASB as part of the Derivatives Implementation Group
process. SFAS No. 149 also amends SFAS No. 133 to incorporate clarifications of
the definition of a derivative. SFAS No. 149 is effective for contracts entered
into or modified after June 30, 2003, and should be applied prospectively. The
adoption of SFAS No. 149 did not have a material impact on our earnings or
financial position. Note 3 - Related Party Transactions In
January 2003, we sold our building in Centennial, Colorado and Nordstrom
subsequently leased it back from a third party (see Note 8). We pay rent
monthly to Nordstrom under a three-year sublease agreement. Rent paid to
Nordstrom was $1,596 and $73 for the year ended January 31, 2004 and for the
month ended January 2003, respectively. We sublease space in the building to
the Bank under a three-year term, paid on a month-to-month basis. Rent received
from the Bank was $1,596, $1,664 and $1,980 in 2003, 2002 and 2001. We also own property adjacent to the office building on which Nordstrom locates
its data center. Rent received from Nordstrom for the data center, under a
month-to-month agreement, was $60, $61, and $61 in 2003, 2002 and 2001. We pay a monthly marketing fee to the Bank for its marketing efforts to
increase customer accounts receivable balances upon which we earn service
charge income. The fee is based on the
amount of revenue generated by our customer accounts receivable. Fees paid to
the Bank were $3,032, $4,353 and $5,899 in 2003, 2002 and 2001. 20 of 26




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Note 4 - Interest, Net The components of interest, net are as follows: Year ended January 31,
    
    2004
    
    2003
    
    2002Note payable to Nordstrom
    
    $
    855
    
    
    $
    785
    
    
    $
    8,410Short-term debt
    
    
    
    
    
    
    331
    
    
    
    Long-term debt
    
    
    21,167
    
    
    
    22,670
    
    
    
    16,602Total interest cost
    
    
    22,022
    
    
    
    23,786
    
    
    
    25,012Less: Interest income
    
    
    (1,909
    )
    
    
    (1,095
    )
    
    
    (305
    )Interest, net
    
    $
    20,113
    
    
    $
    22,691
    
    
    $
    24,707
 Interest income of $1,876, $1,039 and $305 was received from affiliates in
2003, 2002 and 2001. Note 5 - Income Taxes We file consolidated income tax returns with Nordstrom. Income taxes have been
provided on a separate return basis, and the difference between the effective
tax rate and the statutory Federal income tax rate is due to the provision for
state and local income taxes. At January 31, 2004 and 2003, amounts due to
Nordstrom for income taxes totaled $2,240 and $3,041 and are included in
Payable to affiliates, net and Receivable from affiliates and other
receivables, net, respectively. The components of income taxes are as follows: Year ended January 31,
    
    2004
    
    2003
    
    2002Current income taxes:Federal
    
    $
    24,428
    
    
    $
    32,361
    
    
    $
    8,280State and local
    
    
    1,125
    
    
    
    1,315
    
    
    
    420Total current income taxes
    
    
    25,553
    
    
    
    33,676
    
    
    
    8,700Deferred income taxes
    
    
    631
    
    
    
    (6,189
    )
    
    
    Total income taxes
    
    $
    26,184
    
    
    $
    27,487
    
    
    $
    8,700
 Deferred income tax assets and liabilities result from temporary differences in
the timing of recognition of revenue and expenses for tax and financial
reporting purposes. The deferred tax assets are related to the sale of
our building in Centennial, Colorado and the subsequent amortization of the deferred gain
(see Note 8). 21 of 26




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Note 6 - Customer Accounts Receivable Customer accounts receivable, net, consists of the following: January 31,
    
    2004
    
    2003Private label trade receivables:Unrestricted accounts
    
    $
    6,121
    
    
    $
    3,188Restricted accounts
    
    
    589,991
    
    
    
    613,647Allowance for doubtful accounts
    
    
    (20,320
    )
    
    
    (22,385
    )Private label trade receivables, net
    
    $
    575,792
    
    
    $
    594,450
 We have no credit risk with respect to the Accounts, as Nordstrom bears the
risk of credit loss. Through April 30, 2002, we owned an undivided, subordinate interest (Class B
Certificate) in a pool of VISA credit card receivables. External investors held
the Class A Certificates and the Bank owned the Seller Retained Certificate and
Interest Only Strip. On May 1, 2002, the Class B Certificates were repaid. We
received cash in the amount of $11,060 representing the face value of the note
plus accrued interest and recognized a gain on redemption of $661. The gain is
the excess of cash received over the carrying amount of the Class B
Certificate, and was recognized in the second quarter of 2002. In 2001, we issued $300 million of receivable-backed securities supported by
substantially all of our private label credit card receivables. This
transaction is accounted for as a secured financing. The private label
receivables also serve as collateral for a variable funding facility with a
limit of $200 million. Nothing was outstanding on this facility on January 31,
2004. Total principal receivables of the securitized portfolio at January 31, 2004
and 2003 were approximately $584,828 and $609,784, and receivables more than 30
days past due were approximately $14,910 and $16,973. Net charged off
receivables for the years ended January 31, 2004, 2003 and 2002 were $28,703,
$29,555 and $28,134. Our continuing involvement in the securitization of private label receivables
will include pledging new receivables to the master note trust and accounting
for the transaction as a secured financing. The Bank will continue to service
the portfolio. Note 7 - Notes Receivable from Affiliates Notes receivable from affiliates consists of amounts due from the Bank for
borrowings under an agreement dated May 1, 2002 and amounts due from Nordstrom
for borrowings under an agreement dated February 1, 2002. Borrowings under the
agreements with the Bank are due upon prior written notice of no less than
one year and one day and borrowings under the agreement with
Nordstrom are due upon demand. Both agreements bear interest at rates based on the A1/P1
Commercial Paper rate (1.2% at January 31, 2004). Nothing was outstanding on
the note receivable from Nordstrom at January 31, 2004 and 2003. At January 31,
2004 and 2003 $205,435 and $84,395 was outstanding on the note receivable from
the Bank. 22 of 26




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Note 8 - Land, Buildings and Equipment Land, buildings and equipment consist of the following: January 31,
    
    2004
    
    2003Land and land improvements
    
    $
    158
    
    
    $
    158Leasehold improvements
    
    
    17
    
    
    
    8Fixtures and equipment
    
    
    181
    
    
    
    180Construction in progress
    
    
    13
    
    
    
    369
    
    
    
    346Less accumulated depreciation
    
    
    (90
    )
    
    
    (82
    )Land, buildings and equipment, net
    
    $
    279
    
    
    $
    264
 In January 2003, we sold
our building in Centennial, Colorado for $20,000
and Nordstrom subsequently leased it back from a third party. We pay rent
monthly to Nordstrom under a three-year sublease agreement. The gain of $16,022
is being recognized as a reduction to rent expense evenly over the 15 year life
of the lease. We compute depreciation using a combination of accelerated and straight-line
methods. Estimated useful lives by major asset category are as follows: Asset
    
    Life (in years)Leasehold improvements
    
    Shorter of life of lease or asset lifeFixtures and equipment
    
    3-15
 Note 9 - Note Payable to Nordstrom The note payable to Nordstrom represents amounts borrowed under an agreement
dated February 1, 2002. Borrowings under the agreement are due upon demand and
bear interest at rates based on the A1/P1 Commercial Paper rate (1.2% at
January 31, 2004). At January 31, 2004 and 2003 there was $118,850 and $74,460
outstanding on the note payable. Other activity during the year is related to short-term borrowings drawn on our
variable funding note (see Note 6). Nothing was outstanding on this note at
January 31, 2004 and 2003. 23 of 26




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Note 9 - Note Payable to Nordstrom (Cont.) A summary of notes payable is as follows: Year ended January 31,
    
    2004
    
    2003
    
    2002Average daily borrowings outstanding:Nordstrom
    
    $
    69,932
    
    
    $
    49,293
    
    
    $
    218,517Other
    
    
    
    
    
    
    370
    
    
    
    Maximum amount outstanding:Nordstrom
    
    
    232,575
    
    
    
    166,285
    
    
    
    338,680Other
    
    
    
    
    
    
    15,000
    
    
    
    Weighted average interest rate:During the year:Nordstrom
    
    
    1.2
    %
    
    
    1.6
    %
    
    
    3.8
    %Other
    
    
    
    
    
    
    2.0
    %
    
    
    At year-end:Nordstrom
    
    
    1.2
    %
    
    
    1.3
    %
    
    
    
 Note 10 - Long-Term Debt Long-term debt consists of the following: January 31,
    
    2004
    
    2003Notes payable, 6.7%, due 2005
    
    $
    97,500
    
    
    $
    100,000Receivable-backed private label
term note, 4.82%, due 2006
    
    
    300,000
    
    
    
    300,000Total long-term debt
    
    $
    397,500
    
    
    $
    400,000
 Our principal payments on long-term debt will be $97,500 in 2005 and $300,000
in 2006. Note 11 - Supplementary Cash Flow Information Supplementary cash flow information is as follows: Year ended January 31,
    
    2004
    
    2003
    
    2002Cash paid during the year for:Interest
    
    $
    22,032
    
    
    $
    25,263
    
    
    $
    26,728Income taxes paid to Nordstrom
    
    
    26,985
    
    
    
    30,736
    
    
    
    3,610
 24 of 26




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Note 12 - Selected Quarterly Data (Unaudited) Year ended January 31, 2004
    
    1st quarter
    
    2nd quarter
    
    3rd quarter
    
    4th quarter
    
    TotalRevenue
    
    $
    27,141
    
    
    $
    26,570
    
    
    $
    26,618
    
    
    $
    27,232
    
    
    $
    107,561Earnings before income taxes
    
    
    17,679
    
    
    
    17,799
    

    
    
    18,039
    
    
    
    18,221
    
    
    
    71,738Net earnings
    
    
    11,209
    
    
    
    11,320
    
    
    
    11,454
    
    
    
    11,571
    
    
    
    45,554
 Year ended January 31, 2003
    
    1st quarter
    
    2nd quarter
    
    3rd quarter
    
    4th quarter
    
    TotalRevenue
    
    $
    27,626
    
    
    $
    29,007
    
    
    $
    28,087
    
    
    $
    29,296
    
    
    $
    114,016Earnings before income taxes
    
    
    18,150
    
    
    
    19,204
    
    
    
    18,235
    
    
    
    19,717
    
    
    
    75,306Net earnings
    
    
    11,530
    
    
    
    12,194
    
    
    
    11,575
    
    
    
    12,520
    
    
    
    47,819
 Note 13 - Subsequent Event During the first quarter of
2004, we purchased $200,000 of three year Class A and B variable
funding notes from the Nordstrom Credit Card Master Note Trust. These
notes are collateralized by Nordstroms VISA credit card
receivables and pay interest at one month LIBOR plus a floating
spread. The floating spread will be re-calculated quarterly, in
accordance with the terms of the transaction documents. 25 of 26




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Nordstrom Credit, Inc. and Subsidiary
Schedule II - Valuation and
Qualifying Accounts
(Dollars in thousands) Column C
    
    Column DColumn A
    
    Column B
    
    Additions
    
    Deductions
    
    Column EAccountBalance
    
    Charged to
    
    Charged
    
    write-offs
    
    Balancebeginning
    
    costs and
    
    to other
    
    net of
    
    end ofDescription
    
    of period
    
    expenses
    
    accounts
    
    recoveries
    
    periodHoldback allowance -
customer accounts
receivable
Year ended:January 31, 2004
    
    $
    22,385
    
    
    
    
    
    
    $
    27,975
    *
    
    $
    30,040
    
    
    $
    20,320January 31, 2003
    
    $
    23,022
    
    
    
    
    
    
    $
    28,918
    *
    
    $
    29,555
    
    
    $
    22,385January 31, 2002
    
    $
    16,531
    
    
    
    
    
    
    $
    34,624
    *
    
    $
    28,133
    
    
    $
    23,022
 * Bad debt expenses are reflected on the books of Nordstrom for Accounts
generated through sales at Nordstrom stores. 26 of 26




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##### Table of Contents



EXHIBIT INDEX Exhibit
    
    Method of Filing3.1
    
    Articles of Incorporation
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 1991, Exhibit 3.13.2
    
    By-laws, as amended and restated on May 19,
1998
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 3.210.1
    
    Investment Agreement dated October 8, 1984 between
Registrant and Nordstrom, Inc.
    
    Incorporated by reference from the
Registrants Form 10, Exhibit 10.110.2
    
    Operating Agreement dated August 30, 1991 between
Registrant and Nordstrom National Credit Bank
    
    Incorporated by reference from the
Registrants Form 10-Q for the quarter
ended July 31, 1991, Exhibit 10.1, as
amended10.3
    
    First Amendment to the Operating Agreement dated
August 30, 1991 between Registrant and Nordstrom
National Credit Bank, dated March 1, 2000
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2001, Exhibit 10.310.4
    
    Second Amendment to the Operating Agreement dated
August 30, 1991 between Registrant and Nordstrom
National Credit Bank, dated October 1, 2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.410.5
    
    Corporate Services Agreement dated February 1, 2001
between Registrant and Nordstrom federal
savings bank (fsb)
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2001, Exhibit 10.410.6
    
    First Amendment to the Corporate Services
Agreement dated February 1, 2001 between
Registrant and Nordstrom fsb, dated February
1, 2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.610.7
    
    Second Amendment to the Corporate Services
Agreement dated February 1, 2001 between
Registrant and Nordstrom fsb, dated February
1, 2002
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.710.8
    
    Series 1996-A Supplement to Master Pooling and
Servicing Agreement dated August 14, 1996
between Registrant, Nordstrom National
Credit Bank and Norwest Bank Colorado, N.A.,
as trustee
    
    Incorporated by reference from the
Registrants Form 10-Q for the quarter
ended October 31, 1996, Exhibit 10.310.9
    
    Amendment to the Series 1996-A Supplement to
Master Pooling and Servicing Agreement dated
August 14,1996 between Registrant, Nordstrom
National Credit Bank, and Norwest Bank Colorado,
N.A., as trustee, dated December 10, 1997
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 1998, Exhibit 10.13




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##### Table of Contents





Exhibit
    
    Method of Filing10.10
    
    Second amendment to the Series 1996-A Supplement
to Master Pooling and Servicing Agreement dated
August 14, 1996 between Registrant, Nordstrom
National Credit Bank, and Norwest Bank Colorado,
N.A., as trustee, dated February 28, 1999
    
    Incorporated by reference from the
Registrants Form 10-Q for the quarter
ended April 30, 1999, Exhibit 10.110.11
    
    Third amendment to the Series 1996-A Supplement
to Master Pooling and Servicing Agreement dated
August 14, 1996 between Registrant, Nordstrom
National Credit Bank, and Norwest Bank Colorado,
N.A., as Trustee, dated October 1, 2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.1110.12
    
    Business Account Operating Agreement dated
February 1, 1997 between Registrant and
Nordstrom, Inc.
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.1610.13
    
    Amendment to the Business Account Operating
Agreement dated February 1, 1997 between
Registrant and Nordstrom, Inc., dated October 1,
2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.1710.14
    
    Second Amendment to the Business Account
Operating Agreement dated February 1, 1997
between Registrant and Nordstrom, Inc., dated
November 30, 2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.1810.15
    
    Recourse Agreement dated March 1, 2001 between
Registrant and Nordstrom, Inc.
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.1910.16
    
    Amendment to the Recourse Agreement dated
March 1, 2001 between Registrant and Nordstrom,
Inc., dated October 1, 2001
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2010.17
    
    Receivables Purchase Agreement dated October 1,
2001 between Registrant and Nordstrom Private
Label Receivables, LLC
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2110.18
    
    Transfer and Servicing Agreement dated October 1,
2001 between Nordstrom Private Label Receivables,
LLC, Nordstrom fsb, Wells Fargo Bank Minnesota,
N.A., and Nordstrom Private Label Credit Card
Master Note Trust
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2210.19
    
    Master Indenture dated October 1, 2001 between
Nordstrom Private Label Credit Card Master Note
Trust and Wells Fargo Bank Minnesota, N.A., as
trustee
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.23






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##### Table of Contents



Exhibit
    
    Method of Filing10.20
    
    Series 2001-1 Indenture Supplement dated October 1,
2001 between Nordstrom Private Label Credit
Card Master Note Trust and Wells Fargo Bank
Minnesota, N.A. as trustee
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2410.21
    
    Series 2001-2 Indenture Supplement dated
December 4, 2001 between Nordstrom Private Label
Credit Card Master Note Trust and Wells Fargo
Bank Minnesota, N.A. as trustee
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2510.22
    
    Amended and Restated Trust Agreement dated
October 1, 2001 between Nordstrom Private Label
Receivables, LLC, and Wilmington Trust
Company, as trustee
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2002, Exhibit 10.2610.23
    
    Note Purchase Agreement dated December 4, 2001
between Nordstrom Private Label Receivables,
LLC, Nordstrom fsb, Falcon Asset Securitization
Corporation, and Bank One, NA, as agent
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.2510.24
    
    First Amendment to the Note Purchase Agreement
dated December 4, 2001 between Nordstrom
Private Label Receivables, LLC, Nordstrom fsb,
Falcon Asset Securitization Corporation, and
Bank One, NA, as agent, dated December 2, 2002
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.2610.25
    
    Second Amendment to the Note Purchase Agreement
dated December 4, 2001 between Nordstrom Private
Label Receivables, LLC, Nordstrom fsb, Falcon
Asset Securitization Corporation, and Bank One, NA,
as agent, dated December 2, 2003
    
    Filed herewith electronically10.26
    
    Loan agreement dated February 1, 2002 between
 Nordstrom, Inc. and Registrant
    
    Incorporated by reference from the
Registrants Form 10-Q for the
quarter ended April 30, 2002,
Exhibit 10.110.27
    
    Loan agreement dated February 1, 2002 between
 Registrant and Nordstrom, Inc.
    
    Incorporated by reference from the
Registrants Form 10-Q for the
quarter ended April 30, 2002,
Exhibit 10.210.28
    
    Master Note Agreement dated November 1, 2003
between Nordstrom fsb and Registrant
    
    Filed herewith electronically10.29
    
    Purchase and Sale Agreement dated December
16, 2002 between Registrant and Nudo-Weiner
Associates, LLC
    

Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.30




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##### Table of Contents



Exhibit
    
    Method of Filing10.30
    
    First Amendment to the Purchase and Sale
Agreement dated December 16, 2002 between
Registrant and Nudo-Weiner Associates, LLC,
dated December 19, 2002
    
    Incorporated by reference from the
Registrants Form 10-K for the year
ended January 31, 2003, Exhibit 10.3112.1
    
    Computation of Ratio of Earnings Available for Fixed
Charges to Fixed Charges
    
    Filed herewith electronically23.1
    
    Independent Auditors Consent
    
    Filed herewith electronically31.1
    
    Certification of President required by
Section 302(a) of the Sarbanes-Oxley Act of 2002.
    
    Filed herewith electronically31.2
    
    Certification of Vice President and Treasurer
required by Section 302(a) of the Sarbanes-Oxley
Act of 2002.
    
    Filed herewith electronically32.1
    
    Certification of President regarding
annual report containing financial statements as
required by Section 906 of the Sarbanes-Oxley Act
of 2002.
    
    Filed herewith electronically32.2
    
    Certification of Vice President and Treasurer
regarding annual report containing financial
statements as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
    
    Filed herewith electronically