Chris Holloway - Director, Investor Relations Blake W. Nordstrom - President, Director Michael G. Koppel - Chief Financial Officer, Executive Vice President Peter E. Nordstrom - Executive Vice President and President Merchandising, Director Erik B. Nordstrom - Executive Vice President, President Stores, Director

Deborah Weinswig - Citigroup Neely Tamminga - Piper Jaffray Jennifer Black - Jennifer Black & Associates Charles Grom - J.P. Morgan Michelle Clark - Morgan Stanley Lorraine Maikis Hutchinson - Banc of America Merrill Lynch Robert Drbul - Barclay’s Capital Richard Jaffe - Stifel Nicolaus Liz Dunn - Thomas Weisel Partners Adrianne Shapira - Goldman Sachs Michael Exstein - Credit Suisse Theresa Donohue - Neuberger Berman Maggie Gilliam - Gilliam & Company

Hello and welcome to the Nordstrom fourth quarter 2008 conference call. At the request of Nordstrom, today’s conference call is being recorded. (Operator Instructions) I will now introduce Chris Holloway, Director of Investor Relations for Nordstrom. You may begin, sir.

Thank you. Good afternoon, everyone and thank you for joining us on the call. Today’s call will last approximately 45 minutes, which includes time for questions and answers. Please limit yourself to one question so we can respond to as many people on the call today as possible. Before we begin, let me remind everyone that today’s discussion will contain forward-looking statements which are subject to risks and uncertainties that could cause the company’s actual results to differ materially from the expectations and assumptions discussed due to a variety of factors that affect the company, including the risks specified in the company’s most recently filed Form 10-K and Form 10-Q. Additionally, there will be a non-GAAP reconciliation document posted on investor.nordstrom.com which will detail any non-GAAP metrics discussed on today’s call. Here to discuss Nordstrom's strategy, fourth quarter performance, and 2009 outlook are Blake Nordstrom, President of Nordstrom Inc., and Mike Koppel, Executive Vice President and Chief Financial Officer. Also joining us for Q&A are Pete Nordstrom, President of Merchandising; and Erik Nordstrom, President of Stores. With that, I will turn the call over to Blake. Blake W. Nordstrom: Thank you, Chris and good afternoon, everyone. I will leave the bulk of our 2008 comments to Mike. However, I would like to make some brief remarks about the current environment and what we are doing to meet the needs of our customers and operate our business. This afternoon we reported 2008 net earnings of $1.83 per share, a decrease of 36% from the prior year. The full year results were impacted by a decrease of 9% in same-store sales. Needless to say, this was a challenging year. From a high level, here are some general comments on how we are approaching business during these difficult times. First, customer service will always be our number one priority. Our sales people strive to deepen the connection with our customers through their product knowledge, ability to offer solutions, and save the customers time. Our level of customer service isn't limited to our full line stores. It extends to Nordstrom Direct, Nordstrom Rack, and our credit business. The investments we’ve made in the last five years to enhance the one-on-one relationships our sales people have with our customers are more important to our business than ever. Capabilities like personal book, buy online, pick-up in store, fashion rewards program, and the ability for sales people to find inventory anywhere in the company -- all of these things help serve the needs of our customers better through all our channels. We continue to work on adjusting our merchandise mix to the times. We are not going after a different customer or changing our strategy, but her circumstances have clearly changed over the past year. Our customer still wants newness, fashion, quality and brand -- in fact, the most searched brands through Nordstrom Direct this past holiday season were virtually identical to the list from one year ago. Our product offering is broad and we can make adjustments to the mix without changing who Nordstrom is or how we are positioned in the market. Our merchants are working hard with our vendors to provide the right balance of quality, value, and price points for our customers. In addition to our efforts on people and product, we’ve made good strides in 2008 on the key drivers with our business model. We reacted quickly and effectively to changing sales trends in 2008 and ended the fiscal year with inventory levels well aligned to sales. We also had a disciplined approach to finding and executing on expense reduction opportunities and will continue these efforts. Our CapEx plans are also significantly reduced. First, by reducing the number of major remodels from an average of about six per year to about two per year until economic conditions improve. We have not cut maintenance capital because it’s important that we maintain the look, feel, and experience of shopping in our stores. Second, several of our new full line stores were delayed or cancelled by our real estate development partners. This year we anticipate opening three new full line stores and relocating one full line store, which his down from eight new stores and one relocation in 2008. We remain in a strong financial position to weather these times and take advantage of strategic opportunities. We believe we are well-positioned to deepen our connection with customers, maintain a disciplined cost structure, and have a strong financial foundation to position us for the future. Now I will turn the call over to Mike. Michael G. Koppel: Thanks, Blake and good afternoon, everyone. Today I will review our fourth quarter results and then spend the majority of my time discussing our plans for 2009. Although the retail operating environment was challenging in the fourth quarter, we continue to effectively align the key drivers of our business to current trends. Inventories are now aligned with sales trends, we continue to make good progress in reducing expenses, and sales were slightly better than our expectations. We are beginning 2009 with a healthy balance sheet, credit ratings well into investment grade territory, and access to significant liquidity. For planning purposes, we are assuming that the trends we experienced in the fourth quarter will continue through 2009. Our actions on inventory, expenses working capital, and capital expenditures will enable us to generate positive free cash flow in 2009 and position the company well when the economy recovers. Moving on to the review of our results, earnings per diluted share for the full fiscal year of 2008 were $1.83, a decrease of 36% from $2.88 last year. Earnings before interest and taxes, or EBIT, were $779 million, a 37% decrease compared to last year’s EBIT of $1.2 billion. Total sales decreased 6.3%, driven by a 9% same-store sales decrease. For the fourth quarter, earnings per diluted share were $0.31, a decrease of 66% from $0.92 last year. EBIT was $156 million, a 59% decrease compared to last year’s EBIT of $384 million. Same-store sales for the quarter decreased 12.5%. By channel, full line same-store sales decreased 15.8% and Nordstrom Rack same-store sales decreased 1.5%. Sales for our direct segment continued to be healthy, increasing 9.7%. Our gross profit rate for the quarter declined 561 basis points, driven by a combination of higher markdown rates and deleverage of buying and occupancy costs. Our merchant and store teams responded well to the intense competitive environment and held market share in the midst of unprecedented competitive markdowns. Year-end inventory per square foot was down 12% in the prior year, which is in line with fourth quarter same-store of negative 12.5%. Our SG&A expense reduction efforts yielded $25 million of savings in the fourth quarter. These efforts partially offset $58 million of increased SG&A from higher bad debt reserves and new stores. Wrapping up our review of the income statement for the quarter, finance charge and other income increased $14 million, primarily due to growth in our accounts receivable. Net interest expense of $33 million was higher than last year due to changes in our capital structure made in the fourth quarter of last year. Turning to the balance sheet, we believe we are beginning the 2009 fiscal year with an appropriate level of inventory. Our receipts are planned in line with our sales plan and we will monitor sales closely for any changes in trends. During the fourth quarter, we had $250 million of long-term debt mature. We paid those notes using the commercial paper markets and at the end of the fourth quarter, we had $275 million of commercial paper outstanding. We are continuing to monitor the credit markets to determine the best time to refinance these short-term borrowings with long-term debt. We ended the year with $72 million of cash and $675 million available in short-term borrowing capacity. Our next debt maturity is a $350 million securitized note due in April of 2010. Total debt at quarter end was $2.5 billion, which yielded an adjustment debt to EBITDAR ratio of 2.5 times. This amount of leverage is low for our industry and supports our plan of maintaining an investment grade credit rating. Our access to liquidity and credit ratings provide the financial strength and flexibility to support our business. Next, I will discuss our outlook for fiscal year 2009 -- our variable cost business model provides flexibility to align cost drivers and protect cash flow during periods of challenging business. While our model adjusts to changing sales trends, we are taking additional actions on the key drivers of our business to generate positive free cash flow, maintain a strong balance sheet, and mitigate operating margin deterioration. We are assuming the trends experienced in the fourth quarter will continue through 2009 and are planning same-store sales to be negative 10% to negative 15% for the year. This plan delivers earnings per share in the range of $1.10 to $1.40 for the full year. We expect the first half of 2009 to be the most challenging, with same-store sales 300 to 400 basis points below the outlook for the fiscal year. We expect our 2009 gross profit rate to be 150 basis points to 250 basis points lower than the rate in 2008. Gross profit rates are likely to be under continued pressure until we lap the significant markdowns taken in the back half of 2008. We expect our SG&A expenses to be $100 million to $175 million lower than 2008, although lower sales volume will increase the SG&A rate by 40 to 70 basis points. We have been focused on continuously finding and executing on cost efficiencies since the fall of 2007. Over the course of 2008 and planning for 2009, we have reduced our expenses by approximately $260 million, which have more than offset additional SG&A from new stores of $125 million and bad debt of $75 million. We have been rigorous in reducing fixed expenses with targeted reductions in labor, salary increases, discretionary spending, marketing, and technology. Finance charge and other income is expected to increase $55 million to $60 million, as we will have a full year of the credit card pricing changes we implemented in 2008. Our credit card business is a crucial part of our integrated business model and we strongly believe our credit card products and service enhance our ability to earn and retain the loyalty of our customers. However, we have observed a continued softening in underlying credit trend and ended the quarter with a total delinquency rate of 3.8% and net charge-off of 6.8%. The worsening unemployment trends will continue to put pressure on credit card metrics and our 2009 plan assumes that unemployment rates exceed 9%. Finally, net interest expense is anticipated to be higher by $20 million to $25 million, due to higher cost of debt and higher average net debt levels. We have reduced 2009 net capital expenditures to approximately $325 million from our original plan of approximately $560 million. Seventy-five percent of capital expenditures will be spent on new stores, remodels, and relocations, and we plan to relocate one full line store and open three new full line stores in 2009. The remaining capital expenditures are for technology, maintenance, and general purposes. Depreciation and amortization will be approximately $275 million for the full year. I would like to take this opportunity to discuss our communication practices. As always, we remain committed to communicating clearly and transparently with all of our stakeholders. With this objective in mind, we will continue to provide our expectations for annual results and will update those annual expectations with each quarterly earnings release. As the economy has weakened and become more unpredictable, our ability to accurately predict near term results has become more difficult. Given this uncertainty, we do not feel it is appropriately to continue providing quarterly EPS estimates. We believe that continuing to provide our annual expectations and line item detail combined with the continued release of monthly sales will enable stakeholders to effectively monitor and assess the company’s performance. While 2009 is likely to be another challenging year, we are focused on the factors in our control and are constantly striving to enhance the customer experience. Our current financial plan is focused on generating positive free cash flow, maintaining a strong balance sheet, and mitigating operating margin deterioration. We remain confident in our long-term value growth strategy and look forward to the future. Now we will open the call up for questions.

(Operator Instructions) Our first question is from Deborah Weinswig with Citigroup. Deborah Weinswig - Citigroup: Thanks. Blake, can you please give a little bit of color -- I think on the third quarter earnings call you had talked about lowering the regular price in over 800 styles. Can you talk about how that works and how we should think about 2009 in terms of pricing and your offering at different price points? Blake W. Nordstrom: I think I’ll take a moment to comment on those remarks I made then, and then also maybe have Pete weigh in if I don’t cover it all. I did comment on the November call that at that time, we took roughly 800 styles in on average, reduced them 22% and that was in response to the times that we were facing then and trying to address the quality/value relationship right in the middle of our half yearly sale as well. And so we are trying not to be prescriptive on that but our merchants are working hard with our vendors to ensure that we have the right balanced offering. Pete, what would you maybe add to that? Peter E. Nordstrom: The only thing I would add to that is our desire is to be a full-priced retailer, and what that means is getting the price right up front. And so that was really an attempt to make sure that we are being as sharp as we can be right up front and not have to sell things through any kind of promotional activities or gimmicks, I guess. It’s a little hard to say exactly what that did for us because we don’t have the ability to contrast if we did nothing. I think how it really played out is it really is just an extension of the philosophy we’ve always had and that’s to try to be a regular priced retailer with the best possible value up-front and not be undersold, so it’s really a continuation of that. I would say the tangible benefit of this is it really created a good platform for our sales people to have a conversation starter with our customers, to be able to entice them about an item that they had on the floor that was really a great value as we had it really spread throughout the whole store. So we’re going to continue to work with our vendors and to scrutinize all of this internally to make sure that we are being -- offering the kind of value that sells something at the first price. Deborah Weinswig - Citigroup: Okay, that’s extremely helpful. And then Mike, in terms of -- very impressive with regard to SG&A in ’08 and obviously the guidance for ’09 is pretty incredible in terms of thinking about the ability to cut costs. How should we think about the biggest buckets -- you know, how can we really kind of measure you against your goals? Michael G. Koppel: Sure. Well, thanks, Deborah. You know, in terms of the biggest buckets when you look at the savings, it’s been roughly half related to what we would call our variable cost component, which is primarily related to our selling costs and associated costs that go with the selling activities. And the other half is around areas of overhead, and that would include all ranges from labor to discretionary costs to marketing and technology. You know, the approach we took, it’s very clear that the direction that the business, the cycle is in right now is that we are heading back to sales per square foot productivity levels that are roughly where they were in about 2003. And we targeted to get back all of our -- what I would say support and headquarter cost back to those levels and we were successful in doing so. So that’s allowed us to I think improve the leverage of the company and to ensure we have positive free cash flow. We continue to look for opportunities. You know, I don’t think the journey is over. We think we are in a very difficult environment and we will continue to look for the right things to do to ensure that we have a very healthy company. Deborah Weinswig - Citigroup: Great. Thanks so much and best of luck.

Our next question is from Neely Tamminga with Piper Jaffray. Neely Tamminga - Piper Jaffray: The comp guidance for the first half, is that reflective of current trends? Has it just built-in some conservatism or is there some sort of calendar shift that we need to be aware of? And then I guess related to calendar, just curious on the timing of anniversary sale. I know it kind of shifts around from time to time or rather the half-yearly. Just wondering how we should be thinking about that. Michael G. Koppel: In terms of comp, you know, our thinking around the first half of the year is a continuation of current trend and as you may recall last year, the front half of the year we were roughly at a mid negative single digit and it accelerated pretty materially in the back half. So we are thinking of those things, those two factors as we consider the pace of business for 2009. In terms of calendar for anniversary… Peter E. Nordstrom: It lines up, both half yearly will line up in -- after Memorial Day and anniversary lines up with last year as well. Neely Tamminga - Piper Jaffray: And any impact from Easter shift then as well? Peter E. Nordstrom: That’s all captured in the first half. Neely Tamminga - Piper Jaffray: Okay. Okay, great. Thanks.

Our next question is from Jennifer Black with Jennifer Black & Associates. Jennifer Black - Jennifer Black & Associates: Good afternoon and congratulations on managing your inventories and expenses. I wondered if you have any data that actually tells you how many of your charge card customers also have accounts with Saks and Nieman’s, and then I wondered also if you’re doing any kind of research on any of your customer base, as well as charge card customers. Thank you. Michael G. Koppel: In terms of your first question, certainly we do have information for all of our customers that are on our Visa account. We know shopping patterns with not only Saks and Nieman’s but with a variety of other competitors. We understand that and to the extent we can, we use it for marketing but that -- at this point in time, that’s as far as we go. Jennifer Black - Jennifer Black & Associates: Okay, and are you doing any kind of research? Michael G. Koppel: No, not in particular on that. Jennifer Black - Jennifer Black & Associates: Okay, and then just one other thing -- did you give out D&A? Michael G. Koppel: Pardon me? Jennifer Black - Jennifer Black & Associates: D&A -- depreciation and amortization? Michael G. Koppel: Yes, it was $275 million for the year. Jennifer Black - Jennifer Black & Associates: Okay, thanks. Good luck.

Our next question is from Charles Grom with J.P. Morgan. Charles Grom - J.P. Morgan: Thanks. Good afternoon. Mike, just on the finance charge line, it was up 20% it looks like in the fourth quarter. In the third quarter, it looked like it was flat. I know some of it is APR, some if it is receivables. Just wondering if you could dig in a little bit for us for that. And along those lines, it looks like you are outlining 2009 to be up close to 19%, another increase. I just wonder if you could kind of flush that out for us. Michael G. Koppel: Sure. Finance charge, part of the decline is a result of just the slowing in the receivable growth year over year. We are just starting to see the impact of the increase in pricing which took in -- which went into effect the middle of November and started to bill out sometime in the middle of December, so we are going to see the majority of that impact of that pricing change over fiscal year 2009. Charles Grom - J.P. Morgan: And could you just detail what that pricing change was? I just haven’t seen it. Michael G. Koppel: It was basically -- you know, the way we price our credit card, we price it -- you know, it is tier priced based on -- primarily based on quality of card and FICO scoring, and it was a tiered increase that averaged roughly in overall 3% increase in APR for the portfolio of the cards. Charles Grom - J.P. Morgan: Okay, and then just on the SG&A, what’s embedded in your outlook for bad debt, the accrual that you guys are going to be running for the year? Michael G. Koppel: For 2009, the bad debt is roughly equal to what it was in 2008. In 2008, the total bad debt expense was about $180 million. Charles Grom - J.P. Morgan: Okay, and then along those lines, your outlook for charge-offs? Michael G. Koppel: Well, like we said in the comments, our model is built on -- the key drivers are unemployment. We’re assuming that the model is going to be driven by an unemployment index that’s greater than 9% and then we should see the growth in the charge-off align roughly to the change in unemployment. But in terms of the actual charge-off rate, we haven’t disclosed that specifically. Charles Grom - J.P. Morgan: Okay. Thanks very much for the details.

Our next question is from Michelle Clark with Morgan Stanley. Michelle Clark - Morgan Stanley: Yes, good afternoon. Thank you. First question -- embedded in your gross margin assumptions for 2009, what is your IMU outlook? And then the second question is on the credit card -- how do you feel about current reserve levels? Thank you. Michael G. Koppel: In terms of IMU, the plan is for IMU to be slightly down for next year. And then I’m sorry, the second part in terms of the credit card? Michelle Clark - Morgan Stanley: How do you feel about current reserve levels? Michael G. Koppel: Okay. Yeah, well based on where we are right now, like I said, is our reserves at the end of the year were based on an expected 9% unemployment in 2009. We calculate reserves based on a projected 12-month forward activity and it’s that activity that reflects that unemployment rate. So based on the information we have today, best available and best sense of the direction of the business, we feel pretty good about the reserve. Michelle Clark - Morgan Stanley: Thank you.

Our next question is from Lorraine Maikis Hutchinson with Banc of America Merrill Lynch. Lorraine Maikis Hutchinson - Banc of America Merrill Lynch: Thank you. Good afternoon. I was just hoping for a little bit more detail on the initiative to lower price points on those 800 units. Can you just share with us -- I mean, did you sell those products through at a faster rate or require lower markdowns? And then, anymore granularity on your plans for moving that price point down in 2009 would be helpful? Peter E. Nordstrom: Well, it’s our belief that it helped sell the products and as I mentioned, was a good conversation started to engage customers. What we’ve noticed though is our selling on clearance products, on clearance items is a higher percentage than it’s been for us in really the recent past and so clearly the customer is interested in comparison pricing and some of these lower prices were black line items that we were able to create a comparison on but I think again in the long run, it’s really not in our best interest to try to just create comparisons for the sake of creating comparisons. We think to earn the customers’ confidence with our pricing over the long haul, we need to price it the right way going in. I guess it’s fair to assume that our assumption through all of this is that we will be able to mitigate some markdowns by pricing it right going in. Lorraine Maikis Hutchinson - Banc of America Merrill Lynch: Thank you.

Our next question is from Robert Drbul with Barclay’s Capital. Robert Drbul - Barclay’s Capital: Good afternoon. Just a couple of quick questions -- when you look at the store opening program for ’09 and looking forward to 2010, can you talk about exactly how many of the stores that you had that were actually will be delayed or how many of them have exactly been cancelled? And when you look at 2010, is that -- you know, the four to five, is that still a good number when we look out a little bit further now? Erik B. Nordstrom: This is Erik. We’re -- as was mentioned, we have three new stores for ’09 and I think that’s the pace you should expect from us for the next -- for the foreseeable future, is around three stores, maybe four stores a year. I don’t have exactly what that’s from. I guess it depends how many have fallen off from when your starting point was. The store opening calendar has changed quite a bit the last 12 to 18 months, really been driven by the developers not being able to execute these projects, either from lack of financing or being able to lease the projects -- all sorts of factors related to the economy. But there’s still, you know, from our perspective, the long range subject hasn’t changed in that we still have plenty of headroom to grow the company. Obviously the environment isn't conducive to that in ’09. Will it change in ‘010? We’re not making those plans at this point but our plan horizon in new stores is at least three years, so we still expect to reach the growth potential of this company and that really hasn’t changed. It will probably just take longer to get there. Robert Drbul - Barclay’s Capital: Okay. And would you guys address how your stores in California are performing versus the rest of the chain? Erik B. Nordstrom: California continues to lag the rest of the company. Robert Drbul - Barclay’s Capital: Is it dramatically different than the comp store sales trend? Erik B. Nordstrom: It’s -- I don’t think I’d say dramatically. It’s lagged for, boy, 18 months now and it’s been fairly consistent through that time. Our sales by geography match fairly well with the fall in the housing markets around the country and California again has been at the bottom for us. Robert Drbul - Barclay’s Capital: Great. Thank you very much.

Our next question is from Richard Jaffe with Stifel Nicolaus. Richard Jaffe - Stifel Nicolaus: Good afternoon. A couple of just quick follow-up questions on the new store schedule looking out, the new emphasis or renewed emphasis on the rack stores and it obviously makes sense, particularly given your success there. I’ve been thinking about the full line stores and the ability to perhaps manage that growth downward if the environment remains tough. And then as a follow-on to that, the New York market growing more attractive every day. It’s something that was high on your priority list not too long ago. I’m wondering if that’s something you can or would consider revisiting opportunistically. Blake W. Nordstrom: As you noted in the racks, we do see some opportunities there and I think it’s important to note that about 24, even 36 months ago, we started working internally about our rack business and its opportunities and some of the fruits of those labors are starting to bear now. We do have more flexibility than we do with our full line store model in terms of lead times. We had purposely kind of held back the rack growth while we focused on the core part of our business in the full line stores and we just think there’s some opportunities to kind of right-size that balance, if you will, and so we’ve been playing catch-up a little bit. And again, it’s built in with the flexibility that there’s roughly about a 12-month lead time on those stores, whereas Erik mentioned, it’s 36 to 48 months with a full line store. In terms of your question on Manhattan, we have looked at that in the past and there were some rumors, what have you. We haven’t gotten close to announcing any type of deal and there’s nothing at this point we could comment at all and certainly that whole part of the country is changing now, just like the rest of the country. And so we look at it in terms of it’s a very major retail market where we don’t have a store but it’s still very important that it meet our hurdles for us to sign up for something there. So there’s nothing close that we can talk about. Richard Jaffe - Stifel Nicolaus: Thanks a lot.

Our next question is from Liz Dunn with Thomas Weisel Partners. Liz Dunn - Thomas Weisel Partners: Two questions -- one relates to competition; what are you seeing with Saks promotional posture and as we sort of fast-forward here a little bit, do you see any opportunity with any retailers who are closing stores to take some of their space? And then my second question -- actually two questions that are just maintenance -- why was CapEx higher than expected and why is depreciation and amortization going down year over year? Thanks. Peter E. Nordstrom: I’ll address the promotional pricing situation. It was really unprecedented for us in the fourth quarter. We compete across a fairly wide spectrum so we’ve obviously competed with Macy’s in the past on price and all the way through to Nieman’s but it’s usually the pressure comes more on some of the lower price stuff that we carry, more the department store world than it has with the Saks and Nieman’s, for example. But it was much different for us in really November and December. And if you look at our competitive markdowns, which we track in terms of a reason code or how the markdowns come about, it was actually 10 times more in December than it was the previous year based on a competitive situation. So yeah, it had a big impact on us. We’re not going to be purely just reactive -- I mean, we want to price right going in but we also aren’t going to create promotions just kind of out of desperation to generate cash. I think listening to what Mike talked about in terms of our financials, that’s not the position we’re in but if we’re carrying the same products and dealing with the same customers in the same markets, we obviously are going to be competitive to that. So I think it remains to be seen how that’s going to play itself out. I mean, hopefully that was just an adjustment that some of our competitors took to get themselves in line with their inventory. As you can see from our plans and our results, our inventories are basically in line with our sales trends so we don’t foresee, at least on our end, having to do a bunch of new promotional activity but we’re going to be responsive to what’s happening in the marketplace. I guess that’s probably the best way to put it. In terms of taking advantage of other retailer space that might become available, that’s highly speculative. We haven’t considered that at all. One thing I would say is that we are going to continue to be opportunistic. Erik talked about the headroom to be able to grow and if opportunities come along that are great for us, we’ll consider that but we have absolutely nothing that we’re considering now as a result of what may have transpired over the last few months. Liz Dunn - Thomas Weisel Partners: Okay, and then on the CapEx and D&A? Michael G. Koppel: Sure. As far as the D&A, the D&A is not lower; in fact, it’s slightly higher and it’s right around where we expected it to be, as well CapEx. Our CapEx for the year actually came in a little bit below where we thought it was last quarter and then obviously for next year in 2009, it’s significantly lower than our original plan that we had a year ago, and that’s just because of the changes we had in openings and remodels. Liz Dunn - Thomas Weisel Partners: I’m sorry, maybe I should just clarify -- I had $302 million in D&A this year and 275 next year; I was wondering about the decline year over year expected for 2009. And then I had in my notes that you were expecting $510 million as of November in CapEx and it came in a bit higher than that. Was that just a mistake on your part? Michael G. Koppel: Yeah, maybe we could take it offline and just fine-tune those numbers. Liz Dunn - Thomas Weisel Partners: Okay. Michael G. Koppel: Thank you.

Our next question is from Adrianne Shapira with Goldman Sachs. Adrianne Shapira - Goldman Sachs: Thanks. Mike, I just wanted to dig into the cost savings a little bit. Last quarter, you had outlined about $100 million in cost savings for ’09 and it sounds like you are assuming bad debt levels flat year over year, so perhaps help us understand where the incremental perhaps $75 million in savings is coming from and how much is that variable and how much due to a lower new store openings? Michael G. Koppel: Sure. Well, you know, I think the difference between where we were last quarter and this quarter as we continue to roll through the planning process, we wanted to make sure that we had the most realistic plan and weren’t in a reactionary mode for next year. So we did take I think you know a deeper dive into our plans, into our cost structure to generate some more savings. I would tell you that on average, the incremental dollars that we’ve gotten, whether it’s versus last year or versus what we said last quarter, is roughly half variable and the other half is fixed related. All those fixed related are not related to changes in new stores. They are all related to additional programs, whether it be labor changes or cutting back on other investments or discretionary costs. And like I said earlier, we continue to look at that and we have a very fluid process and our goal is to assure that during this tough period that we’ve got a plan ahead of us that allows us to keep the company I think at a strong cash flow level and a reasonable operating margin. Adrianne Shapira - Goldman Sachs: Okay, thanks, that’s helpful. And then just following up on the appropriate promotional cadence, I mean, as you mentioned, you’ve been on top of controlling what you can in terms of your inventory. Others have had -- have not had such great success. What do you think is the appropriate promotional cadence? You’ve been sticking with the two events per year. I know this past year you were testing the incentive rewards for your best customers -- how did that fare? Should we expect more tests going on in ’09 to perhaps set a different cadence in light of today’s extreme discounting? Peter E. Nordstrom: Well, we don’t have any new promotional events planned in terms of our big clearance times, as you mentioned the two half-yearly sales, but we also are able to monitor the regular priced sell-through of everything that we own and mark down accordingly based on rate of sale, as all our competitors would. But I think that what we are going to try to do is stick to the regular seasonal rhythms that have been going on in the industry for quite some time. That’s what we are anticipating but again, there will be some competitive forces I am sure that may change that. And the second part of the question was -- Adrianne Shapira - Goldman Sachs: Just -- Peter E. Nordstrom: Oh, the rewards. Adrianne Shapira - Goldman Sachs: Right. Peter E. Nordstrom: You know, what that enables us to do is if we feel like we need to do something to market our business and create some kind of promotion, it’s much different than just a blanket percentage off. It’s a way of being able to cultivate our best customers and being able to develop that relationship even further in a more targeted way, and so I think we’ve tried some of those things. For the most part, I think they have worked out well for us. I think we’ll continue to explore those opportunities as we go forward because again, it really works better I think for our long-term strategy about trying to be the store of choice for our target customers. Adrianne Shapira - Goldman Sachs: Okay, and then just Blake, I think in your prepared remarks, you had talked about adjusting the mix. Could you just help us understand what that means in terms of how we should be thinking about categories, any sort of changes in terms of positioning in good, better, best, versus categories? How will the floor look differently as you adjust the mix? Blake W. Nordstrom: I think -- and I’m probably speaking within Pete’s area, but it’s important -- what I was trying to convey is that these are not wholesale changes and that we have a pretty broad and balanced inventory mix within each lifestyle department and we believe there’s some opportunities for some adjustments, whether it’s some editing, some depth, sharpening of some price points, but making sure that there’s a balanced offering across the spectrum, whether that’s color, brand, sizes, price points. There hasn’t been a wholesale change from the customer. The customer has pulled back a notch but their expectations in terms of fashion and quality and newness are as high as they’ve ever been and I think our challenges as merchants is to ensure every dollar invested in our inventory is resonating with the customer and it’s difficult in this environment when you are looking ahead six months and placing that buy, what is the appropriate mix and what is creating the reason for the customer to buy something new? Otherwise she’s sitting on the sideline or it’s more promotionally driven. Adrianne Shapira - Goldman Sachs: Okay, so it’s not necessarily a quantification in terms of a -- you could share with us how you think about the percentage of the mix, good, better, best, how that had shaped up and how it will look like going forward? Peter E. Nordstrom: I think to expand on that, what I would say is I don’t think it’s really going to adjust the categories that we are participating in, in terms of getting in something new and getting out of something. We’re going to be in the same categories and you heard mention that the demand from our customers in terms of brands they expect from Nordstrom they are looking for from us are the same as they have been literally identically from last year. What we are tracking though is the average price that we own something at compared to the previous years and that’s gone up a bit for us in the last couple of years, even excluding the designer stuff that we’ve done. And so I think it’s fair for us to look at that to try to reconcile the balance subject in terms of how we allocate across the breadth of everything that we carry. And I think we can bring our average price down a little bit to meet more in line with maybe where we were in the last couple of years, and we can do that without doing something remarkably different in terms of the vendor matrix that we carry. Adrianne Shapira - Goldman Sachs: Thank you.

Our next question is from Michael Exstein with Credit Suisse. Michael Exstein - Credit Suisse: Good afternoon, gentlemen. A couple of quick questions for you; I’ve been to a bunch of stores and while I am sure your sales people are soliciting people in the new lower prices, the signage doesn’t seem to be calling it out, for those of us that shop by ourselves. I’m just wondering about how you are backing up that message to those that don’t use a personal shopper, number one. Number two, can you talk about the units in the store versus the dollars in the store, and at what stage of the game do you worry about not having enough units in the store? Thank you very much. Blake W. Nordstrom: So Mike, your first question was about the signage, I think -- in communicating our value, signage is part of it. We have over the last couple of years reduced the amount of signs we have in our stores. We are trying to be cleaner, have less clutter. We certainly prefer it that way. We do have signing in all of our stores about our approach to never being undersold. I don’t know how much customers read those or not. I think it’s one vehicle of communication. The other is engaging our sales people and we certainly invest a lot in our sales people, both in quality and quantity, that to have them there available to customers. You know, Pete mentioned earlier a conversation starter with customers and that’s really important, and that can be newness, it can be quality, but it can also be price and it’s -- that’s how we are communicating it and we have found our customers are pretty darn savvy about prices out there. Peter E. Nordstrom: The second half of that, I guess what I would say is when I mentioned that our prices have gone up a little bit over the years but what was going on with that as our results were improving, as our units went down but the net all of it was we were doing more business, but what happened here in the last six, eight months or so is that our prices have gone up and the units were down and down enough whereas the net of that didn’t create increases for us. So as that relates to the way that we stock our stores, I mean, that’s the delicate balancing act that we have to really look at, is to make sure that we’ve got a robust offering that’s compelling and doesn’t look like we’re too light in terms of units on the floor. But if we can adjust within the breadth of our current matrix and the business that we already do, particularly as it relates to replenishment type items, we tend to turn a little bit faster there, it’s more profitable, and I think that we can be in a better inventory position then that will help bolster some of the units that we have on the floor. So the point you bring up there, while we don’t have a specific answer for it, it is something that we are monitoring closely and we are actually spending a lot of time in the next month or so out in stores to make sure that we can go beyond just what it says on paper to actually look and see what it feels like in the store in terms of our unit density. Michael Exstein - Credit Suisse: Great. Thanks a lot.

Our next question is from Theresa Donohue with Neuberger Berman. Your line is open. Theresa Donohue - Neuberger Berman: Hi, everyone, good evening. I was wondering -- if I missed it, I apologize -- the gross margin in the quarter, how much of it was related to markdowns versus buying and occupancy? And related, how does the guidance go down 150 to 250 for ’09 break down between delevering of buying and occupancy and expected markdowns? Michael G. Koppel: In terms of the fourth quarter, the impact to gross profit percent was roughly two-thirds related to merchandise margin and a third of it was related to the deleveraging of buying and occupancy. In terms of 2009, it’s about half and half. Theresa Donohue - Neuberger Berman: Okay, thanks. Michael G. Koppel: Thank you.

Our final question is from Maggie Gilliam with Gilliam & Company. Maggie Gilliam - Gilliam & Company: …store expense and a number of developers have announced that they are not going to go ahead with several projects, and I’m wondering if there’s any scaling back and putting more -- well, I know there is -- more effort going into existing properties and if this by itself may have opened up new and perhaps less expensive and more desirable opportunities going forward. And also, can you quantify the pre-opening expenses, the savings that you will have in 2009 versus last year? Erik B. Nordstrom: On the new projects, certainly the bulk of our recent store openings have come from the consolidation going on in the industry. I think it’s seven of our last 11 stores we’ve opened have directly resulted from consolidation of the industry. So that obviously happened before the current economic downturn, just the dynamics of our mall anchor store industry in particular. So I think opportunities will continue to present themselves with that. Maggie Gilliam - Gilliam & Company: No, I was thinking, Erik, if [Kelvin] is not going to Oyster Bay and on the other hand, they are doing [Fairlane] -- or not Fairlane, the one in Fairfax, Virginia -- you know, things like that. Erik B. Nordstrom: Fair Oaks, you mean? Maggie Gilliam - Gilliam & Company: Fair Oaks, yeah. Erik B. Nordstrom: Well, that example --- Maggie Gilliam - Gilliam & Company: -- I mean, I don’t mean [that] specifically but I mean -- and of course [general growth] is not going ahead with [Summerland]. They’ve got their own problems, obviously but several things that you still have up on your website are not going to happen. Erik B. Nordstrom: You’re right. Those are driven by the developers. We haven’t seen that yet but I think that’s probably a reasonable expectation that re-development of existing properties would replace some new property development. Right now, it has been more of these new projects that have been pulled back, either delayed or cancelled. Maggie Gilliam - Gilliam & Company: Okay. Michael G. Koppel: And the second part of your question on the pre-opening costs, it’s roughly a $10 million savings year over year due to opening fewer stores in ’09. Thank you.

We would like to thank you for joining us today for our fourth quarter earnings call. As a reminder, a replay of this call will be available on the investor relations section of Nordstrom.com under webcasts. Thank you for your time and your interest in Nordstrom.

This does conclude today’s conference. Thank you for participating and you may now disconnect.