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Share-based Compensation | 12 Months Ended
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Jan. 30, 2021
Share-based Payment Arrangement, Noncash Expense [Abstract] |
Share-based Compensation | Share-based Compensation Plan Summary In 2020, the Company's shareholders approved the 2020 Stock Option and Performance Incentive Plan ("2020 Plan"). The 2020 Plan replaced the 2015 Stock Option and Performance Incentive Plan (together with the 2020 Plan, the "Plans"). The Plans provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance-based restricted stock, performance units and unrestricted shares. The Company grants stock options at a price equal to the fair market value of the stock on the date of grant. Stock options have a maximum term of 10 years. Stock options generally vest ratably over three to five years. Restricted stock generally vests (the restrictions lapse) at the end of a three-year period or on a graded basis over a five-year period. Under the Company’s Plans, 166 million options, restricted and unrestricted shares have been authorized to be granted to employees and directors. There were 12 million options and shares available for grant as of January 30, 2021. The Company suspended its annual grant in 2020 as a result of the COVID-19 pandemic. Income Statement Impact The following table provides share-based compensation expense included in the Consolidated Statements of Income (Loss) for 2020, 2019 and 2018:
| 2020 |  | 2019 |  | 2018
| (in millions)
Costs of Goods Sold, Buying and Occupancy | $ | 18 |  |  | $ | 29 |  |  | $ | 29 |
General, Administrative and Store Operating Expenses | 32 |  |  | 58 |  |  | 68 |
Total Share-based Compensation Expense | $ | 50 |  |  | $ | 87 |  |  | $ | 97 |
The tax benefit associated with recognized share-based compensation expense was $10 million for 2020, $18 million for 2019 and $20 million for 2018. Restricted Stock The following table provides the Company’s restricted stock activity for the fiscal year ended January 30, 2021:
| Number of Shares |  | Weighted Average Grant Date Fair Value
| (in thousands) |  |
Unvested as of February 1, 2020 | 8,662 |  |  | $ | 32.00 |
Granted | 1,480 |  |  | 17.05 |
Vested | (2,040) |  |  | 43.38 |
Cancelled | (1,455) |  |  | 28.34 |
Unvested as of January 30, 2021 | 6,647 |  |  | $ | 25.68 |
During 2020, the Company granted a performance-based restricted stock award that includes a specified market condition which can adjust the number of shares which vest under the award. The market condition compares total shareholder return to that of a designated peer group over the performance period. The award was valued using a Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility and the estimated dividend yield. The weighted-average estimated fair value of restricted stock granted was $17.05 per share for 2020, $23.34 per share for 2019 and $30.43 per share for 2018. The fair value of restricted stock awards is generally based on the market value of an unrestricted share on the grant date adjusted for anticipated dividend yields. The Company’s total intrinsic value of restricted stock vested was $33 million for 2020, $39 million for 2019 and $44 million for 2018. The Company’s total fair value at grant date of awards vested was $89 million for 2020, $104 million for 2019 and $86 million for 2018. As of January 30, 2021, there was $45 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock. That cost is expected to be recognized over a weighted-average period of 1.8 years. Tax benefits realized from tax deductions associated with restricted stock vested were $8 million for 2020 and $10 million for 2019 and 2018. Stock Options The following table provides the Company’s stock option activity for the fiscal year ended January 30, 2021:
| Number of Shares |  | Weighted Average Option Price Per Share |  | Weighted Average Remaining Contractual Life |  | Aggregate Intrinsic Value
| (in thousands) |  |  |  | (in years) |  | (in thousands)
Outstanding as of February 1, 2020 | 5,280 |  |  | $ | 51.87 |  |  |  |  |
Exercised | (237) |  |  | 33.13 |  |  |  |  |
Cancelled | (880) |  |  | 45.00 |  |  |  |  |
Outstanding as of January 30, 2021 | 4,163 |  |  | $ | 54.39 |  |  | 5.0 |  | $ | 5,356 |
Vested and Expected to Vest as of January 30, 2021 (a) | 4,144 |  |  | 54.46 |  |  | 5.0 |  | 5,257 |
Options Exercisable as of January 30, 2021 | 3,631 |  |  | 56.57 |  |  | 4.7 |  | 3,048 |
________________ (a)The number of options expected to vest includes an estimate of expected forfeitures. Intrinsic value for stock options is the difference between the current market value of the Company’s stock and the option strike price. The total intrinsic value of options exercised was $2 million for 2020, $3 million for 2019 and $2 million for 2018. The total fair value at grant date of option awards vested was $6 million for 2020 and $9 million for 2019 and 2018. The Company’s total unrecognized compensation cost, net of estimated forfeitures, related to nonvested options was $1 million as of January 30, 2021. This cost is expected to be recognized over a weighted-average period of 1.1 years. The weighted-average estimated fair value of stock options granted was $6.05 per share for 2019 and $6.76 per share for 2018. Cash received from stock options exercised was $8 million for 2020 and $1 million for 2019 and 2018. Tax benefits realized from tax deductions associated with stock options exercised was less than $1 million for 2020, 2019 and 2018. The Company uses the Black-Scholes option-pricing model for valuation of options granted to employees and directors. The Company’s determination of the fair value of options is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards and projected employee stock option exercise behaviors. The following table contains the weighted-average assumptions used during 2019 and 2018:
|  |  | 2019 |  | 2018
Expected Volatility |  |  | 40 | % |  | 36 | %
Risk-free Interest Rate |  |  | 2.2 | % |  | 2.5 | %
Dividend Yield |  |  | 4.4 | % |  | 5.8 | %
Expected Life (in years) |  |  | 3.2 |  | 2.9
The majority of the Company’s stock-based compensation awards are granted on an annual basis in the first quarter of each year. The expected volatility assumption is based on the Company’s analysis of historical volatility. The risk-free interest rate assumption is based upon the average daily closing rates during the period for U.S. treasury notes that have a life which approximates the expected life of the option. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts in relation to the stock price at the grant date. The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding.

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