The following table illustrates activity in the allowance for credit losses: Fiscal year 2014 2013 2012 Allowance at beginning of year $80 $85 $115 Bad debt expense 41 52 42 Write-offs (70) (80) (97) Recoveries 24 23 25 Allowance at end of year $75 $80 $85 Net write-offs as a % of average credit card receivables 2.1% 2.7% 3.5% 30 days or more delinquent as a % of ending credit card receivables 2.1% 1.8% 1.9% Allowance as a % of ending credit card receivables 3.3% 3.7% 4.0% Credit Trends Credit Quality Intercompany Merchant Fees TOTAL COMPANY RESULTS Interest Expense, Net During 2014, our delinquency and net write-off results continued to improve. Net write-offs in 2014 were $46, compared with $57 in 2013 and  $72 in 2012. As delinquencies and net write-offs improved in both 2014 and 2013, we reduced our allowance for credit losses by $5 in both  2014 and 2013. The quality of our credit card receivables at any time reflects, among other factors, general economic conditions, the creditworthiness of our  cardholders and the success of our account management and collection activities. In general, credit quality tends to decline, and the risk of  credit losses tends to increase, during periods of deteriorating economic conditions. Through our underwriting and risk management  standards and practices, we seek to maintain a high-quality cardholder portfolio, thereby mitigating our exposure to credit losses. As of  January 31, 2015, 79.0% of our credit card receivables were from cardholders with FICO scores of 660 or above (generally considered  “prime” according to industry standards) compared with 78.1% as of February 1, 2014. See Note 3: Accounts Receivable in Item 8: Financial  Statements and Supplementary Data for additional information. Intercompany merchant fees represent the estimated costs that would be incurred if our cardholders used third-party cards in our Nordstrom  stores and online. In 2014, this estimate increased to $108 or 5.0% of average credit card receivables from $97 or 4.6% in 2013. This was  primarily driven by the increased use of our credit and debit cards in store and online, as reflected by an increase in inside volume as a  percent of total volume from 53.6% in 2013 to 55.8% in 2014. Interest expense is summarized in the following table: Interest expense, net decreased $23 in 2014 compared with 2013 due to a non-recurring charge of $14 in 2013 related to our debt  refinancing, as well as lower average interest rates on our notes in 2014 driven by our fourth quarter 2013 debt transactions. Interest expense, net increased $1 in 2013 compared with 2012 due to $14 in non-recurring charges related to our debt refinancing, partially  offset by an increase in capitalized interest resulting primarily from planned capital investments related to our Manhattan store and  accelerated Nordstrom Rack growth. Interest Expense, Net (2014 vs. 2013) Interest Expense, Net (2013 vs. 2012) Fiscal year 2014 2013 2012 Interest on long-term debt and short-term borrowings $156 $176 $167 Less: Interest income (1) (1) (2) Capitalized interest (17) (14) (5) Interest expense, net $138 $161 $160 Nordstrom, Inc. and subsidiaries 23 Allowance for Credit Losses and Credit Trends