Lowe's 2015 Annual Report Download - page 60

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51
Shares repurchased for 2015 and 2014 were as follows:
2015
2014
(In millions)
Shares
Cost1
Shares
Cost1
Share repurchase program
53.6
$
3,811
73.8
$
3,880
Shares withheld from employees
0.9
67
0.9
47
Total share repurchases
54.5
$
3,878
74.7
$
3,927
1 Reductions of $3.6 billion were recorded to retained earnings, after capital in excess of par value was depleted, for both
2015 and 2014.
NOTE 8: Accounting for Share-Based Payments
Overview of Share-Based Payment Plans
The Company has a number of active and inactive equity incentive plans (the Incentive Plans) under which the Company has
been authorized to grant share-based awards to key employees and non-employee directors. The Company also has an
employee stock purchase plan (the ESPP) that allows employees to purchase Company shares at a discount through payroll
deductions. All of these plans contain a nondiscretionary anti-dilution provision that is designed to equalize the value of an
award as a result of any stock dividend, stock split, recapitalization, or any other similar equity restructuring.
A total of 199.0 million shares have been previously authorized for grant to key employees and non-employee directors under
all of the Company’s Incentive Plans, but only 80.0 million of those shares were authorized for grants of share-based awards
under the Company’s currently active Incentive Plans. In addition, a total of 70.0 million shares have been previously
authorized for purchases by employees participating in the ESPP.
At January 29, 2016, there were 36.1 million shares remaining available for grants under the currently active Incentive Plans
and 24.3 million shares remaining available for purchases under the ESPP.
The Company recognized share-based payment expense within SG&A expense in the consolidated statements of earnings of
$117 million, $119 million, and $100 million in 2015, 2014 and 2013 respectively. The total associated income tax benefit
recognized was $38 million, $39 million and $32 million in 2015, 2014 and 2013, respectively.
Total unrecognized share-based payment expense for all share-based payment plans was $165 million at January 29, 2016, of
which $97 million will be recognized in 2016, $49 million in 2017 and $19 million thereafter. This results in these amounts
being recognized over a weighted-average period of 1.9 years.
For all share-based payment awards, the expense recognized has been adjusted for estimated forfeitures where the requisite
service is not expected to be provided. Estimated forfeiture rates are developed based on the Company’s analysis of historical
forfeiture data for homogeneous employee groups.
General terms and methods of valuation for the Company’s share-based awards are as follows:
Stock Options
Stock options have terms of seven or 10 years, with one-third of each grant vesting each year for three years, and are assigned
an exercise price equal to the closing market price of a share of the Company’s common stock on the date of grant. Options are
expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period.