Nordstrom 2003 Annual Report Download - page 42

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NORDSTROM, INC. and SUBSIDIARIES
[40 ]
Note 14: Leases
We lease land, buildings and equipment under noncancelable lease
agreements with expiration dates ranging from 2004 to 2080. Certain leases
include renewal provisions at our option. Most of the leases provide for
additional rent payments based upon specific percentages of sales and
require us to pay for certain common area maintenance and other costs.
Fiscal Year 2003 2002 2001
Minimum rent:
Store locations $24,071 $19,609 $26,951
Offices, warehouses
and equipment 23,158 27,610 20,144
Percentage rent:
Store locations 7,920 7,776 8,047
Total rent expense $55,149 $54,995 $55,142
Future minimum lease payments as of January 31, 2004 are as follows:
Capital Operating
Year ended January 31, Leases Leases
2005 $2,398 $73,265
2006 1,932 69,522
2007 1,564 65,216
2008 1,565 61,140
2009 1,565 58,332
Thereafter 7,167 390,731
Total minimum lease payments 16,191 $718,206
Less amount representing interest 4,704
Present value of net minimum lease
payments $11,487
Note 15: Stock-Based Compensation
Stock Option Plan: We have a stock option plan ("the Plan") under which
stock options, performance share units and restricted stock are granted
to key employees. Options vest over periods ranging from four to eight
years, and expire ten years after the date of grant.
Performance Share Units: In 2003, 2002 and 2001 we granted 113,904,
190,396 and 273,864 performance share units, which will vest over three
years if certain financial goals are met. For the first time, 227,881
performance share units vested at 125% of their value as of January 31,
2004. Employees do not pay any monetary consideration upon vesting and
may elect to receive common stock or cash. At January 31, 2004 and 2003,
$18,657 and $4,441 were recorded in accrued salaries, wages and related
benefits for the 2001-2003 grants. As of January 31, 2004 and 2003,
284,805 and 415,640 units were outstanding.
At January 31, 2004, approximately 4,166,239 shares are reserved for
future stock option grants pursuant to the Plan.
We apply APB No. 25, "Accounting for Stock Issued to Employees," in
measuring compensation costs under our stock-based compensation
programs. Stock options are issued at the fair market value of the stock
at the date of grant. Accordingly, we recognized no compensation cost for
stock options issued under the Plan. For performance share units, we record
compensation expense over the performance period at the fair value of
the stock on the date when it is probable that the employees will earn the
units. Stock-based compensation expense for 2003, 2002 and 2001 was
$17,894, $1,130 and $3,414.
notes to consolidated financial statements