text: **Nordstrom, Inc.**
  **Notes to Consolidated Financial Statements**
  Dollar and share amounts in millions except per share, per option and per unit amounts 
  
  **Stock-Based Compensation**
  We recognize stock-based compensation expense related to stock options and restricted stock at their estimated grant date fair value, 
  recorded on a straight-line basis over the requisite service period. The total compensation expense is reduced by estimated forfeitures 
  expected to occur over the vesting period of the award. We estimate the grant date fair value of stock options using the Binomial Lattice 
  option valuation model. Stock-based compensation expense also includes amounts related to HauteLook and Trunk Club stock 
  compensation based on the grant date fair value. Stock-based compensation expense related to the Trunk Club Value Creation Plan is based 
  on the grant date fair value of the payout scenario we believe is probable using the Black-Scholes valuation model and is recognized on an 
  accelerated basis due to performance criteria and graded vesting features of the plan. We also recognize stock-based compensation 
  expense for performance share units and our Employee Stock Purchase Plan, which are based on their fair values as of the end of each 
  reporting period. 
  
  **New Store Opening Costs**
  Non-capital expenditures associated with opening new stores, including marketing expenses, relocation expenses and temporary occupancy 
  costs, are charged to expense as incurred. These costs are included in both buying and occupancy costs and selling, general and 
  administrative expenses according to their nature as disclosed above. 