Nordstrom 2005 Annual Report Download - page 51

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Nordstrom, Inc. and subsidiaries 43
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Amounts in thousands except per share amounts
NOTE 11: LEASES
Future minimum lease payments as of January 28, 2006 are as follows:
Fiscal Year Capital Leases Operating Leases
2006 $1,946 $ 73,389
2007 1,946 73,296
2008 1,946 70,525
2009 1,376 67,892
2010 1,270 63,524
Thereafter 6,990 332,016
Total minimum lease payments 15,474 $680,642
Less amount representing interest (6,137)
Present value of net minimum lease payments $9,337
Rent expense for 2005, 2004 and 2003 was as follows:
Fiscal Year 2005 2004 2003
Minimum rent:
Store locations $62,036 $79,285 $61,451
Offices, warehouses and equipment 15,493 21,104 23,158
Percentage rent:
Store locations 10,607 9,214 7,920
Property incentives: (46,645) (46,737) (37,380)
Total rent expense $41,491 $62,866 $55,149
The rent expense above does not include common area maintenance costs of $16,105, $17,527 and $16,906 in 2005, 2004 and 2003.
NOTE 12: STOCK-BASED COMPENSATION
Stock Option Plans
In 2004, our shareholders approved the 2004 Equity Incentive Plan. We currently grant stock options, performance share units and common shares
under this plan.
STOCK OPTIONS
As of January 28, 2006, we have options outstanding under three stock option plans, (collectively, the “Nordstrom, Inc. Plans”) with 16,189 shares
reserved for future stock grants. Options vest over periods ranging from four to eight years, and expire ten years after the date of grant. Stock
option activity for the Nordstrom, Inc. Plans was as follows:
Fiscal Year 2005 2004 2003
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding, beginning of year 18,320 $13 23,368 $12 23,773 $12
Granted 2,564 26 2,830 20 5,429 9
Exercised (5,822) 13 (7,239) 12 (4,520) 11
Cancelled (718) 16 (639) 13 (1,311) 12
Expired — — — — (3) 7
Outstanding, end of year 14,344 $15 18,320 $13 23,368 $12
Options exercisable at end of year 6,128 $12 7,877 $13 10,714 $13