Stock-Based Compensation	6 Months Ended
Aug. 03, 2019
Stock-Based Compensation.
Stock-Based Compensation	NOTE 14—STOCK-BASED COMPENSATION The Company estimates the value of equity grants based upon an option-pricing model (“OPM”) and recognizes this estimated value as compensation expense over the vesting periods. The Company recognizes expense associated with performance-based awards when it becomes probable that the performance condition will be met. Once it becomes probable that an award will vest, the Company recognizes compensation expense equal to the number of shares which are probable to vest multiplied by the fair value of the related shares measured at the grant date. Stock-based compensation expense is included in selling, general and administrative expenses on the condensed consolidated statements of income. The Company recorded stock-based compensation expense of $5.3 million and $6.1 million during the three months ended August 3, 2019 and August 4, 2018, respectively. The Company recorded stock-based compensation expense of $11.0 million and $14.1 million during the six months ended August 3, 2019 and August 4, 2018, respectively. No stock-based compensation cost has been capitalized in the accompanying condensed consolidated financial statements. 2012 Stock Incentive Plan and 2012 Stock Option Plan As of August 3, 2019, 7,611,816 options were outstanding with a weighted-average exercise price of $56.68 per share and 6,178,614 options were vested with a weighted-average exercise price of $52.15 per share. The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of August 3, 2019 was $610.8 million, $587.6 million, and $521.8 million, respectively. Stock options exercisable as of August 3, 2019 had a weighted-average remaining contractual life of 4.67 years. As of August 3, 2019, the total unrecognized compensation expense related to unvested options was $38.3 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 3.53 years. As of August 3, 2019, the Company had 232,774 restricted stock units outstanding with a weighted-average grant date fair value of $49.53 per share. During the three months ended August 3, 2019, 139,754 restricted stock units vested with a weighted-average grant date and vest date fair value of $60.99 per share. During the six months ended August 3, 2019, 164,889 restricted stock units vested with a weighted-average grant date and vest date fair value of $59.84 per share. As of August 3, 2019, there was $7.8 million of total unrecognized compensation expense related to unvested restricted stock and restricted stock units which is expected to be recognized over a weighted-average period of 2.00 years. Rollover Units In connection with the acquisition of Waterworks in May 2016, $1.5 million rollover units in the Waterworks subsidiary (the “Rollover Units”) were recorded as part of the transaction. The Rollover Units are subject to the terms of the Waterworks LLC agreement, including redemption rights at an amount equal to the greater of (i) the $1.5 million remitted as consideration in the business combination or (ii) an amount based on the percentage interest represented in the overall valuation of the Waterworks subsidiary (the “Appreciation Rights”). The Appreciation Rights are measured at fair value and are subject to fair value measurements during the expected life of the Rollover Units, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Appreciation Rights is determined based on an OPM. The Company did not record any expense related to the Appreciation Rights during both the three and six months ended August 3, 2019 and August 4, 2018. As of both August 3, 2019 and February 2, 2019, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations on the condensed consolidated balance sheets. Profit Interests In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Profit Interests is determined based on an OPM. For both the three months ended August 3, 2019 and August 4, 2018, the Company recorded $0.1 million related to the Profit Interests, which is included in selling, general and administrative expenses on the condensed consolidated statements of income. For both the six months ended August 3, 2019 and August 4, 2018, the Company recorded $0.2 million related to the Profit Interests. As of August 3, 2019 and February 2, 2019, the liability associated with the Profit Interests was $1.4 million and $1.1 million, respectively, which is included in other non-current obligations on the condensed consolidated balance sheets.

Stock-Based Compensation

6 Months Ended

Aug. 03, 2019

NOTE 14—STOCK-BASED COMPENSATION

The Company estimates the value of equity grants based upon an option-pricing model (“OPM”) and recognizes this estimated value as compensation expense over the vesting periods. The Company recognizes expense associated with performance-based awards when it becomes probable that the performance condition will be met. Once it becomes probable that an award will vest, the Company recognizes compensation expense equal to the number of shares which are probable to vest multiplied by the fair value of the related shares measured at the grant date.

Stock-based compensation expense is included in selling, general and administrative expenses on the condensed consolidated statements of income. The Company recorded stock-based compensation expense of $5.3 million and $6.1 million during the three months ended August 3, 2019 and August 4, 2018, respectively. The Company recorded stock-based compensation expense of $11.0 million and $14.1 million during the six months ended August 3, 2019 and August 4, 2018, respectively. No stock-based compensation cost has been capitalized in the accompanying condensed consolidated financial statements.

2012 Stock Incentive Plan and 2012 Stock Option Plan

As of August 3, 2019, 7,611,816 options were outstanding with a weighted-average exercise price of $56.68 per share and 6,178,614 options were vested with a weighted-average exercise price of $52.15 per share. The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of August 3, 2019 was $610.8 million, $587.6 million, and $521.8 million, respectively. Stock options exercisable as of August 3, 2019 had a weighted-average remaining contractual life of 4.67 years. As of August 3, 2019, the total unrecognized compensation expense related to unvested options was $38.3 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 3.53 years.

As of August 3, 2019, the Company had 232,774 restricted stock units outstanding with a weighted-average grant date fair value of $49.53 per share. During the three months ended August 3, 2019, 139,754 restricted stock units vested with a weighted-average grant date and vest date fair value of $60.99 per share. During the six months ended August 3, 2019, 164,889 restricted stock units vested with a weighted-average grant date and vest date fair value of $59.84 per share. As of August 3, 2019, there was $7.8 million of total unrecognized compensation expense related to unvested restricted stock and restricted stock units which is expected to be recognized over a weighted-average period of 2.00 years.

Rollover Units

In connection with the acquisition of Waterworks in May 2016, $1.5 million rollover units in the Waterworks subsidiary (the “Rollover Units”) were recorded as part of the transaction. The Rollover Units are subject to the terms of the Waterworks LLC agreement, including redemption rights at an amount equal to the greater of (i) the $1.5 million remitted as consideration in the business combination or (ii) an amount based on the percentage interest represented in the overall valuation of the Waterworks subsidiary (the “Appreciation Rights”). The Appreciation Rights are measured at fair value and are subject to fair value measurements during the expected life of the Rollover Units, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Appreciation Rights is determined based on an OPM. The Company did not record any expense related to the Appreciation Rights during both the three and six months ended August 3, 2019 and August 4, 2018. As of both August 3, 2019 and February 2, 2019, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations on the condensed consolidated balance sheets.

Profit Interests

In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Profit Interests is determined based on an OPM. For both the three months ended August 3, 2019 and August 4, 2018, the Company recorded $0.1 million related to the Profit Interests, which is

included in selling, general and administrative expenses on the condensed consolidated statements of income. For both the six months ended August 3, 2019 and August 4, 2018, the Company recorded $0.2 million related to the Profit Interests. As of August 3, 2019 and February 2, 2019, the liability associated with the Profit Interests was $1.4 million and $1.1 million, respectively, which is included in other non-current obligations on the condensed consolidated balance sheets.