Nordstrom 2001 Annual Report Download - page 30

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20200324 NORDSTROM
2001 Annual Report • VERSION
8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar
Notes to Consolidated Financial Statements
28 NORDSTROM INC. AND SUBSIDIARIES
Note 13: Leases
The Company leases land, buildings and equipment under
noncancelable lease agreements with expiration dates ranging
from 2002 to 2080. Certain leases include renewal provisions
at the Company’s option. Most of the leases provide for additional
rent payments based upon specific percentages of sales and
require the Company to pay for certain common area maintenance
and other costs.
Year ended January 31, 2002 2001 2000
Minimum rent:
Store locations $26,951 $16,907 $18,794
Offices, warehouses
and equipment 20,144 21,070 19,926
Percentage rent:
Store locations 8,047 9,241 7,441
Total rent expense $55,142 $47,218 $46,161
Future minimum lease payments as of January 31, 2002 are as
follows:
Capital Operating
Year ended January 31, Leases Leases
2003 $1,335 $66,940
2004 1,120 64,480
2005 1,120 60,680
2006 1,120 56,191
2007 1,120 52,285
Thereafter 11,470373,517
Total minimum lease payments 17,285 $674,093
Less amount representing interest 7,851
Present value of net minimum
lease payments $9,434
Note 14: Stock-Based Compensation
Stock Option Plan
The Company has a stock option plan (“the Plan”) under which
stock options, performance share units and restricted stock may
be granted to key employees. Stock options are issued at the fair
market value of the stock at the date of grant. Options vest over
periods ranging from four to eight years, and expire ten years after
the date of grant.
In addition to option grants, the Company granted 273,864,
355,072 and 272,970 performance share units in 2001, 2000
and 1999, which will vest over three years if certain financial goals
are attained. Employees may elect to receive common stock or cash
upon vesting of these performance shares. At January 31, 2002
and 2001, $4,713 and $2,741 was recorded in accrued salaries,
wages and related benefits for these performance shares.
Employees who receive performance share units pay no monetary
consideration. No amounts have been paid and no common stock
has been issued in connection with this program. As of January 31,
2002, 518,189 units were outstanding.
The Company also granted 30,069 and 180,000 shares of
restricted stock in 1999 and 1998, with a weighted average fair
value of $32.09 and $27.75. In September 2000, the Company
accelerated the vesting of 144,000 shares of restricted stock
resulting in compensation expense of $3,039, and also cancelled
14,175 shares of restricted stock as a result of management
changes. In January 2002, the Company accelerated the vesting
on the remaining 9,536 unvested shares of restricted stock,
resulting in compensation expense of $193. At January 31, 2002,
there are no shares of unvested restricted stock.
At January 31, 2002, approximately 7,856,298 shares are
reserved for future stock option grants pursuant to the Plan.
The Company applies Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees,” in measuring
compensation costs under its stock-based compensation programs.
Accordingly, no compensation cost has been recognized for stock
options issued under the Plan. Performance share compensation
expense is recorded over the performance period at the fair value
of the stock at the date when probable that such shares have been
earned. Restricted stock compensation expense is based on the
market price on the date of grant and is recorded over the vesting
period. Stock-based compensation expense for 2001, 2000 and
1999 was $3,414, $6,480 and $3,331.