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Share-Based Compensation (Tables)

12 Months Ended

Feb. 01, 2020

Total Compensation Expense and the Related Tax Benefits Recognized

Total compensation expense included in SG&A and the associated tax benefits recognized related to our share-based compensation plans, were as follows:


	2019		2018		2017
	($ in millions)
Options and shares purchased under the ESPP	$	6	$	7	$	9
Restricted stock and restricted stock units		12		15		6
Total share-based compensation expense	$	18	$	22	$	15

Tax benefit recognized	$	2	$	3	$	4

Assumptions used to Compute Share-Based Compensation Expense

The following table shows the assumptions used to compute the share-based compensation expense:



	Stock Option Plans									Stock Purchase Plan
	2019			2018			2017			2019			2018			2017
Weighted-average risk free rate of interest		2.2	%		2.7	%		2.1	%		2.2	%		2.0	%		1.0	%
Expected volatility		38	%		37	%		25	%		54	%		50	%		30	%
Weighted-average expected award life (in years)		5.5			5.5			5.4			1.0			1.0			1.0
Dividend yield		2.6	%		3.1	%		1.9	%		3.1	%		2.0	%		2.0	%
Weighted-average fair value	$	17.07		$	12.42		$	14.74		$	16.68		$	15.29		$	10.96

Options Granted under Stock Option Plans

The information set forth in the following table covers options granted under the Company’s stock option plans:


		Weighted-		Weighted-
	Number	Average		Average
	of	Remaining		Exercise
	Shares	Contractual Life		Price
	(in thousands)	(in years)		(per share)
Options outstanding at the beginning of the year	2,861			$	52.34
Granted	321				58.65
Exercised	(171)				26.97
Expired or cancelled	(130)				59.79
Options outstanding at February 1, 2020	2,881		5.7	$	54.21
Options exercisable at February 1, 2020	2,162		4.8	$	53.70

Total Intrinsic Value of Options Exercised

The total intrinsic value of options exercised (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the optionee to exercise the option) is presented below:


	2019		2018		2017
	($ in millions)
Exercised	$	5	$	4	$	22

Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable

The aggregate intrinsic value for stock options outstanding, and those outstanding and exercisable (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) is presented below:


	2019
	($ in millions)
Outstanding	$	5
Outstanding and exercisable	$	4

Information about Stock Options Outstanding and Exercisable

The following table summarizes information about stock options outstanding and exercisable at February 1, 2020:


	Options Outstanding				Options Exercisable
		Weighted-
		Average	Weighted-			Weighted-
		Remaining	Average			Average
Range of Exercise	Number	Contractual	Exercise		Number	Exercise
Prices	Outstanding	Life	Price		Exercisable	Price
	(in thousands, except prices per share and contractual life)
$9.85 to $18.84	126	1.1	$	18.60	126	$	18.60
$24.75 to $36.51	377	3.1		32.13	334		31.77
$44.78 to $45.75	567	6.3		44.91	348		44.99
$46.64 to $62.11	927	6.3		59.99	615		60.82
$63.33 to $73.21	884	6.4		68.57	739		67.75
	2,881	5.7	$	54.21	2,162	$	53.70

Restricted Share and Unit Activity

RSU activity is summarized as follows:


			Weighted-Average
	Number		Remaining		Weighted-Average
	of		Contractual		Grant Date
	Shares		Life		Fair Value
		(in thousands)		(in years)		(per share)
Nonvested at beginning of year		1,022			$	47.47
Granted ⁽¹⁾		306				58.48
Vested		(89)				60.54
Performance adjustment ⁽²⁾		(259)
Forfeited		(44)				52.81
Nonvested at February 1, 2020		936		1.3	$	49.25

Aggregate value ($ in millions)	$	46

0.4 million performance-based RSUs were granted during 2018 and are included as granted in the table above. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company’s predefined financial performance targets.

(1)

Included in the units granted are approximately 0.2 million performance-based RSUs. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on the achievement relative to the Company’s predefined financial performance targets.

(2)

This represents adjustments made to performance-based RSU awards and reflect changes in estimates based upon the Company’s current performance against predefined financial targets.