Banana Republic 2014 Annual Report Download - page 72

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60
Employee Stock Purchase Plan
Under our Employee Stock Purchase Plan (“ESPP”), eligible U.S. employees are able to purchase our common
stock at 85 percent of the closing price on the New York Stock Exchange on the last day of the three-month
purchase periods. Accordingly, compensation expense is recognized for an amount equal to the 15 percent
discount. Employees pay for their stock purchases through payroll deductions at a rate equal to any whole
percentage from 1 percent to 15 percent. There were 785,794, 811,223, and 960,930 shares issued under the
ESPP in fiscal 2014, 2013, and 2012, respectively. As of January 31, 2015, there were 3,467,942 shares reserved
for future issuances under the ESPP.
Note 12. Leases
We lease most of our store premises and some of our corporate facilities and distribution centers. These
operating leases expire at various dates through 2030. Most store leases have a five-year base period and
include options that allow us to extend the lease term beyond the initial base period, subject to terms agreed upon
at lease inception. Some leases also include early termination options, which can be exercised under specific
conditions.
The aggregate minimum non-cancelable annual lease payments under leases in effect on January 31, 2015 are
as follows:
($ in millions)
Fiscal Year
2015 $ 1,136
2016 1,096
2017 920
2018 760
2019 638
Thereafter 1,701
Total minimum lease commitments $ 6,251
The total minimum lease commitment amount above does not include minimum sublease rent income of $22
million receivable in the future under non-cancelable sublease agreements.
Rent expense related to our store premises, corporate facilities, and distribution centers under operating leases is
as follows:
Fiscal Year
($ in millions) 2014 2013 2012
Minimum rent expense $ 1,209 $ 1,162 $ 1,104
Contingent rent expense 114 121 123
Less: Sublease income (4) (4) (4)
Total $ 1,319 $ 1,279 $ 1,223
Note 13. Income Taxes
Effective February 2, 2014, we adopted ASU No. 2013-11, Income Taxes, which clarifies the presentation of an
unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward
exists. This adoption did not have a material impact on our Consolidated Financial Statements.