Leases

12 Months Ended

Jan. 28, 2023

NOTE 4: LEASES

We lease the land, buildings, or land and buildings for many of our stores, office facilities and Supply Chain Network facilities, as well as equipment. The following table summarizes the majority of our fixed, non-cancellable lease terms:


Property Type			Lease Term (in years)
Nordstrom stores			15 – 30
Nordstrom Rack stores			Approximately 10
Office and Supply Chain Network facilities			5 – 20

Many of our leases include options that allow us to extend the lease term beyond the initial commitment period. At the commencement of a lease, we generally include only the initial lease term as we have determined that options to extend are not reasonably certain to occur. The exercise of lease renewal options is generally at our sole discretion. At the renewal of an expiring lease, we reassess our options in the agreement and include all reasonably certain extensions in the measurement of our lease term.

Most of our leases also require us to pay certain expenses, such as common area maintenance charges, real estate taxes and other executory costs, the fixed portion of which is included in Operating Lease Cost. We recognize Operating Lease Cost, which is primarily included in occupancy costs, on a straight-line basis over the lease term. Variable lease cost includes payments for variable common area maintenance charges and additional payments based on a percentage of sales, which are recognized when probable. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table summarizes the components of lease cost:


Fiscal year	2022	2021	2020
Operating Lease Cost	$280	$265	$263
Variable lease cost1	97	100	100
Sublease income	(19)	(20)	(19)
Total lease cost, net	$358	$345	$344

1 Variable lease cost includes short-term lease cost, which was immaterial in 2022, 2021 and 2020.

The following table summarizes future lease payments as of January 28, 2023:


Fiscal year									Operating Leases
2023									$339
2024									344
2025									295
2026									247
2027									198
Thereafter									793
Total lease payments1,2									2,216

Less: amount representing interest									(432)
Present value of net lease payments3									$1,784

1 Total lease payments do not include payments for variable lease costs that are required by most of our lease agreements.

2 Total lease payments include Nordstrom Canada future lease payments. On March 2, 2023, Nordstrom Canada commenced a wind-down of its business operations (see Note 15: Subsequent Events for more information).

3 Net lease payments exclude $101 of lease payments for operating leases that were signed but not yet commenced as of January 28, 2023.

The following table includes supplemental information:


Fiscal year	2022	2021		2020
Cash paid related to operating lease liabilities	$354	$371		$332
Operating lease interest	85	87		95
Operating lease liabilities arising from lease agreements	260	137		79

		January 28, 2023		January 29, 2022
Weighted-average remaining lease term		8 years		9 years
Weighted-average discount rate		4.9	%	4.7	%