Nordstrom 2014 Annual Report Download - page 54

Table of Contents
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and per unit amounts
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NOTE 9: FAIR VALUE MEASUREMENTS
We disclose our financial assets and liabilities that are measured at fair value in our Consolidated Balance Sheets by level within the fair
value hierarchy as defined by applicable accounting standards:
Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Other observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs that cannot be corroborated by market data that reflect the reporting entity’s own
assumptions
We did not have any financial assets or liabilities that were measured at fair value on a recurring basis as of January 31, 2015 or February 1,
2014.
Financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable and accounts
payable and approximate fair value due to their short-term nature. We estimate the fair value of long-term debt using quoted market prices of
the same or similar issues and, as such, this is considered a Level 2 fair value measurement. The following table summarizes the carrying
value and fair value estimate of our long-term debt, including current maturities:
January 31, 2015 February 1, 2014
Carrying value of long-term debt1$3,131 $3,113
Fair value of long-term debt 3,693 3,511
1 The carrying value of long-term debt includes the remaining unamortized adjustment from our previous effective fair value hedge.
We also measure certain non-financial assets at fair value on a nonrecurring basis, primarily goodwill and long-lived tangible and intangible
assets, in connection with periodic evaluations for potential impairment. See Note 1: Nature of Operations and Summary of Significant
Accounting Policies for additional information related to goodwill, intangible assets and long-lived assets. We recorded no material
impairment charges for these assets in 2014, 2013 and 2012. We estimate the fair value of goodwill and long-lived tangible and intangible
assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements.
NOTE 10: LEASES
We lease the land or the land and buildings at many of our stores. Additionally, we lease office facilities, warehouses and equipment. Most of
these leases are classified as operating leases and they expire at various dates through 2080. The majority of our fixed, non-cancelable
lease terms are 15 to 30 years for Nordstrom full-line stores and 10 to 15 years for Nordstrom Rack stores. Many of our leases include
options that allow us to extend the lease term beyond the initial commitment period, subject to terms agreed to at lease inception. Most of our
leases also provide for payment of operating expenses, such as common area charges, real estate taxes and other executory costs, and
some leases require additional payments based on sales, referred to as “percentage rent.”
Future minimum lease payments as of January 31, 2015 are as follows:
Fiscal year Capital leases Operating leases
2015 $2 $210
2016 2 231
2017 1 229
2018 1 227
2019 — 219
Thereafter — 1,202
Total minimum lease payments $6 $2,318
Less: amount representing interest (1)
Present value of net minimum lease payments $5