JCPenney 2015 Annual Report Download - page 81
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Table of Contents
As of January 30, 2016, we had $50 million of unrecognized compensation expense related to unearned employee stock awards, which will be recognized
over the remaining weighted-average vesting period of approximately two years. The aggregate market value of shares vested during 2015, 2014 and 2013
was $16 million, $4 million and $25 million, respectively, compared to an aggregate grant date fair value of $27 million, $9 million and $42 million,
respectively.
In addition to the grants above, on March 19, 2015, we granted approximately 2.5 million phantom units as part of our management incentive compensation
plan, which are similar to RSUs in that the number of units granted was based on the price of our stock, but the units will be settled in cash based on the value
of our stock on the vesting date, limited to $15.54 per phantom unit. The fair value of the awards is remeasured at each reporting period and was $7.26 per
share as of January 30, 2016. Compensation expense, which is variable, is recognized over the vesting period with a corresponding liability, which is
recorded in Other accounts payable and accrued expenses and Other liabilities in our Consolidated Balance Sheets, of $17 million as of January 30, 2016.
Awards granted include approximately 154,000 fully vested RSUs to directors during 2015 with a fair value of $8.64 per RSU award.
We conduct a major part of our operations from leased premises that include retail stores, store distribution centers, warehouses, offices and other facilities.
Almost all leases will expire during the next 20 years; however, most leases will be renewed, primarily through an option exercise, or replaced by leases on
other premises. We also lease data processing equipment and other personal property under operating leases of primarily three to five years. Rent expense, net
of sublease income, was as follows:
Real property base rent and straight-lined step rent expense
$ 221
$ 233
$ 237
Real property contingent rent expense (based on sales)
7
8
5
Personal property rent expense
39
53
65
Total rent expense
$ 267
$ 294
$ 307
Less: sublease income(1)
(11)
(13)
(16)
Net rent expense
$ 256
$ 281
$ 291
As of January 30, 2016, future minimum lease payments for non-cancelable operating leases, including lease renewals determined to be reasonably assured
and capital leases, including our note payable, were as follows:
2016 $ 227
2017 200
2018 169
2019 146
2020 129
Thereafter 1,816
Less: sublease income (27)
Total minimum lease payments $ 2,660
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