Nordstrom 2015 Annual Report Download - page 54

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NOTE 11: €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-cancellable
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.ƒ
Future minimum lease payments as of January•30, 2016 are as follows:
Fiscal year Capital€leases Operating€leases
2016 $2 $253
2017 1 271
2018 1 277
2019 … 274
2020 … 255
Thereafter … 1,490
Total minimum lease payments $4 $2,820
Less: amount representing interest …
Present value of net minimum lease payments $4
Rent expense for 2015, 2014 and 2013 was as follows:
Fiscal year 2015 2014 2013
Minimum rent:
Store locations $204 $170 $145
Offices, warehouses and equipment 41 36 35
Percentage rent 13 14 14
Property incentives (82)(83)(69)
Total rent expense $176 $137 $125
The rent expense above does not include common area charges, real estate taxes and other executory costs, which were $97 in 2015, $88 in
2014 and $81 in 2013.
NOTE 12: €COMMITMENTS AND CONTINGENCIES
Our estimated total purchase obligations, capital expenditure contractual commitments and inventory purchase orders were $2,010 as of
January•30, 2016. In connection with the purchase of foreign merchandise, we have outstanding trade letters of credit totaling $1 as of
January•30, 2016.
Plans for our Manhattan full-line store, which we currently expect to open in 2019, ultimately include owning a condominium interest in a
mixed-use tower and leasing certain nearby properties. As of January•30, 2016, we had approximately $176 of fee interest in land, which is
expected to convert to the condominium interest once the store is constructed.•We have committed to make future installment payments
based on the developer meeting pre-established construction and development milestones. In the unlikely event that this project is not
completed, the opening may be delayed and we may be subject to future losses or capital commitments in order to complete construction or
to monetize our previous investments in the land.
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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