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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________
Commission file number:0-14678

Ross Stores, Inc.
(Exact name of registrant as specified in its charter)
Delaware94-1390387
(State or other jurisdiction of incorporation or(I.R.S. Employer Identification No.)
organization)
 
 5130 Hacienda Drive, Dublin,
California
94568-7579
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code(925)965-4400
 
Former name, former address and former N/A
   fiscal year, if changed since last report.

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
 Common stock, par value $.01ROSTNASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý     Accelerated filer o Non-accelerated filer o Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No

The number of shares of Common Stock, with $.01 par value, outstanding on November 12, 2021 was 353,329,735.
1


Ross Stores, Inc.
Form 10-Q
Table of Contents
Page
Item 1.
Condensed Consolidated Statements of Operations–Three and nine months ended October 30, 2021 and October 31, 2020
Condensed Consolidated Statements of Comprehensive Income (Loss)–Three and nine months ended October 30, 2021 and October 31, 2020
Condensed Consolidated Balance Sheets–October 30, 2021, January 30, 2021, and October 31, 2020
Condensed Consolidated Statements of Cash FlowsNine months ended October 30, 2021 and October 31, 2020
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.

2


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Operations
Three Months EndedNine Months Ended
($000, except stores and per share data, unaudited)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Sales$4,574,541 $3,754,509 $13,895,595 $8,281,894 
Costs and Expenses
Cost of goods sold3,326,004 2,711,419 9,935,271 6,681,530 
Selling, general and administrative725,761 877,857 2,118,602 1,812,657 
Interest expense, net18,744 28,740 56,500 64,261 
Total costs and expenses4,070,509 3,618,016 12,110,373 8,558,448 
Earnings (loss) before taxes504,032 136,493 1,785,222 (276,554)
Provision (benefit) for taxes on earnings (loss) 119,002 5,296 429,455 (123,956)
Net earnings (loss) $385,030 $131,197 $1,355,767 $(152,598)
Earnings (loss) per share
Basic$1.10 $0.37 $3.85 $(0.43)
Diluted$1.09 $0.37 $3.82 $(0.43)
Weighted-average shares outstanding (000)
Basic351,071 352,481 352,308 352,320 
Diluted353,081 354,457 354,477 352,320 
Store count at end of period1,924 1,869 1,924 1,869 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


Condensed Consolidated Statements of Comprehensive Income (Loss)
Three Months EndedNine Months Ended
($000, unaudited)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Net earnings (loss)$385,030 $131,197 $1,355,767 $(152,598)
Other comprehensive income (loss)    
Comprehensive income (loss)
$385,030 $131,197 $1,355,767 $(152,598)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


Condensed Consolidated Balance Sheets
($000, except share data, unaudited)October 30, 2021January 30, 2021October 31, 2020
Assets
Current Assets
Cash and cash equivalents$5,259,595 $4,819,293 $4,416,124 
Accounts receivable158,765 115,067 122,654 
Merchandise inventory2,231,242 1,508,982 1,630,390 
Prepaid expenses and other195,309 249,149 347,399 
Total current assets7,844,911 6,692,491 6,516,567 
Property and Equipment
Land and buildings1,194,125 1,187,045 1,185,442 
Fixtures and equipment3,357,986 3,243,206 3,201,940 
Leasehold improvements1,317,979 1,278,134 1,243,755 
Construction-in-progress506,903 376,076 372,950 
  6,376,993 6,084,461 6,004,087 
Less accumulated depreciation and amortization3,592,707 3,373,965 3,297,203 
Property and equipment, net2,784,286 2,710,496 2,706,884 
Operating lease assets3,032,175 3,084,819 3,132,056 
Other long-term assets254,362 230,061 215,159 
Total assets$13,915,734 $12,717,867 $12,570,666 
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable$2,652,881 $2,256,928 $2,426,390 
Accrued expenses and other625,426 592,122 655,408 
Current operating lease liabilities620,675 598,120 590,122 
Accrued payroll and benefits512,336 400,273 269,709 
Income taxes payable 54,680  
Current portion of long-term debt64,991 64,910  
Total current liabilities4,476,309 3,967,033 3,941,629 
Long-term debt2,451,283 2,448,175 2,512,037 
Non-current operating lease liabilities2,551,162 2,621,594 2,672,139 
Other long-term liabilities296,819 268,558 290,795 
Deferred income taxes156,944 121,867 135,029 
Commitments and contingencies
Stockholders’ Equity
Common stock, par value $.01 per share
   Authorized 1,000,000,000 shares
   Issued and outstanding 353,694,000, 356,503,000
   and 356,449,000 shares, respectively
3,537 3,565 3,564 
Additional paid-in capital1,681,802 1,579,824 1,546,078 
Treasury stock(535,642)(478,550)(478,419)
Retained earnings2,833,520 2,185,801 1,947,814 
Total stockholders’ equity3,983,217 3,290,640 3,019,037 
Total liabilities and stockholders’ equity$13,915,734 $12,717,867 $12,570,666 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


Condensed Consolidated Statements of Stockholders’ Equity
Nine Months Ended October 30, 2021
Additional
paid-in
capital
Common stockTreasury
stock
Retained
earnings
(000)Shares  AmountTotal
Balance at January 30, 2021356,503 $3,565 $1,579,824 $(478,550)$2,185,801 $3,290,640 
Net earnings— — — — 476,479 476,479 
Common stock issued under stock
plans, net of shares
used for tax withholding614 6 6,057 (47,378)— (41,315)
Stock-based compensation— — 28,674 — — 28,674 
Dividends declared ($0.285 per share)
— — — — (101,657)(101,657)
Balance at May 1, 2021357,117 $3,571 $1,614,555 $(525,928)$2,560,623 $3,652,821 
Net earnings— — — — 494,258 494,258 
Common stock issued under stock
plans, net of shares
used for tax withholding30 — 6,471 (1,637)— 4,834 
Stock-based compensation— — 29,584 — — 29,584 
Common stock repurchased(1,449)(14)(5,492)— (170,278)(175,784)
Dividends declared ($0.285 per share)
— — — — (101,727)(101,727)
Balance at July 31, 2021355,698 $3,557 $1,645,118 $(527,565)$2,782,876 $3,903,986 
Net earnings— — — — 385,030 385,030 
Common stock issued under stock
plans, net of shares
used for tax withholding97 1 6,091 (8,077)— (1,985)
Stock-based compensation— — 38,517 — — 38,517 
Common stock repurchased(2,101)(21)(7,924)— (233,250)(241,195)
Dividends declared ($0.285 per share)
— — — — (101,136)(101,136)
Balance at October 30, 2021353,694 $3,537 $1,681,802 $(535,642)$2,833,520 $3,983,217 
The accompanying notes are an integral part of these condensed consolidated financial statements.
























6


Condensed Consolidated Statements of Stockholders’ Equity
Nine Months Ended October 31, 2020
Additional
paid-in
capital
Common stockTreasury
stock
Retained
earnings
(000)Shares  AmountTotal
Balance at February 1, 2020356,775 $3,568 $1,458,307 $(433,328)$2,330,702 $3,359,249 
Net loss— — — — (305,842)(305,842)
Common stock issued under stock
plans, net of shares
used for tax withholding318 3 5,441 (32,317)— (26,873)
Stock-based compensation— — 24,739 — — 24,739 
Common stock repurchased(1,171)(12)(3,576)— (128,879)(132,467)
Dividends declared ($0.285 per share)
— — — — (101,414)(101,414)
Balance at May 2, 2020355,922 $3,559 $1,484,911 $(465,645)$1,794,567 $2,817,392 
Net earnings— — — — 22,047 22,047 
Common stock issued under stock
plans, net of shares
used for tax withholding84 1 5,630 (29)— 5,602 
Stock-based compensation— — 22,158 — — 22,158 
Balance at August 1, 2020356,006 $3,560 $1,512,699 $(465,674)$1,816,614 $2,867,199 
Net earnings— — — — 131,197 131,197 
Common stock issued under stock
plans, net of shares
used for tax withholding443 4 6,009 (12,745)3 (6,729)
Stock-based compensation— — 27,370 — — 27,370 
Balance at October 31, 2020356,449 $3,564 $1,546,078 $(478,419)$1,947,814 $3,019,037 
The accompanying notes are an integral part of these condensed consolidated financial statements.







7


Condensed Consolidated Statements of Cash Flows
Nine Months Ended
($000, unaudited)October 30, 2021October 31, 2020
Cash Flows From Operating Activities
Net earnings (loss) $1,355,767 $(152,598)
Adjustments to reconcile net earnings (loss) to net cash provided
by operating activities:
Depreciation and amortization262,139 268,193 
Loss on early extinguishment of debt 239,769 
Stock-based compensation96,775 74,267 
Deferred income taxes35,077 (14,650)
Change in assets and liabilities:
Merchandise inventory(722,260)201,949 
Other current assets(50,139)(31,732)
Accounts payable422,277 1,126,574 
Other current liabilities160,984 118,679 
Income taxes(60,442)(119,513)
Operating lease assets and liabilities, net4,767 8,979 
Other long-term, net(1,292)63,206 
Net cash provided by operating activities1,503,653 1,783,123 
Cash Flows From Investing Activities
Additions to property and equipment(377,916)(339,545)
Net cash used in investing activities(377,916)(339,545)
Cash Flows From Financing Activities
Issuance of common stock related to stock plans18,626 17,088 
Treasury stock purchased(57,092)(45,091)
Repurchase of common stock(416,979)(132,467)
Dividends paid(304,520)(101,411)
Net proceeds from issuance of short-term debt 805,601 
Payments of short-term debt  (804,972)
Net proceeds from issuance of long-term debt 2,965,115 
Payments of long-term debt (775,009)
Payments of debt extinguishment and debt issuance costs (232,000)
Net cash (used in) provided by financing activities(759,965)1,696,854 
Net increase in cash, cash equivalents, and restricted cash and cash equivalents365,772 3,140,432 
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period4,953,769 1,411,410 
End of period$5,319,541 $4,551,842 
Supplemental Cash Flow Disclosures
Interest paid$82,209 $70,347 
Income taxes paid $454,821 $10,207 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8


Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended October 30, 2021 and October 31, 2020
(Unaudited)

Note A: Summary of Significant Accounting Policies

Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of October 30, 2021 and October 31, 2020, the results of operations, comprehensive income (loss), and stockholders’ equity for the three and nine month periods ended October 30, 2021 and October 31, 2020, and cash flows for the nine month periods ended October 30, 2021 and October 31, 2020. The Condensed Consolidated Balance Sheet as of January 30, 2021, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended.

Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended January 30, 2021.

The results of operations, comprehensive income (loss), and stockholders’ equity for the three and nine month periods ended October 30, 2021 and October 31, 2020, and cash flows for the nine month periods ended October 30, 2021 and October 31, 2020 presented herein are not necessarily indicative of the results to be expected for the full fiscal year.

Use of accounting estimates. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, employee retention credits under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and legal claims. The ongoing uncertainties and continued impacts from the COVID-19 pandemic increase the challenge of making estimates; actual results could differ materially from the Company’s estimates.

Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and nine month periods ended October 30, 2021 and October 31, 2020:

Three Months EndedNine Months Ended
October 30, 2021

October 31, 2020October 30, 2021October 31, 2020
1
Ladies26 %23 %26 %24 %
Home Accents and Bed and Bath25 %26 %25 %26 %
Men’s15 %15 %14 %14 %
Accessories, Lingerie, Fine Jewelry, and Cosmetics13 %15 %14 %14 %
Shoes11 %12 %12 %13 %
Children’s10 %9 %9 %9 %
Total100 %100 %100 %100 %
1 Sales mix for the nine month period ended October 31, 2020 represents sales for the period the stores were open.

Cash, restricted cash, and restricted investments. Restricted cash, cash equivalents, and investments serve as collateral for certain insurance and trade payable obligations of the Company. These restricted funds are invested in bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations.

9


The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:
($000)October 30, 2021January 30, 2021October 31, 2020
Cash and cash equivalents$5,259,595 $4,819,293 $4,416,124 
Restricted cash and cash equivalents included in:
  Prepaid expenses and other10,790 85,711 85,322 
  Other long-term assets49,156 48,765 50,396 
Total restricted cash and cash equivalents59,946 134,476 135,718 
Total cash and cash equivalents, and restricted cash and cash equivalents$5,319,541 $4,953,769 $4,551,842 
Property and equipment. As of October 30, 2021 and October 31, 2020, the Company had $14.4 million and $22.4 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and equipment, Accounts payable, and Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets.

Operating leases. In response to the COVID-19 pandemic, the Financial Accounting Standards Board (“FASB”) provided relief under Accounting Standards Update (“ASU”) 2016-02, Leases (Accounting Standards Codification “ASC” 842). Under this relief, companies can make a policy election on how to treat lease concessions resulting directly from the COVID-19 pandemic, provided that the modified contracts result in total cash flows that are substantially the same or less than the cash flows in the original contract.

The Company made the policy election to account for lease concessions that result from the COVID-19 pandemic as if they were made under enforceable rights in the original contract. Additionally, the Company made the policy election to account for these concessions outside of the lease modification framework described under ASC 842. The Company recorded accruals for deferred rental payments and recognized rent abatements or concessions as variable lease costs in the periods incurred. Accruals for rent payment deferrals are included in Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets.

Supplemental cash flow disclosures related to leases. Operating lease assets obtained in exchange for new operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) were as follows:

Three Months EndedNine Months Ended
($000)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Operating lease assets obtained in exchange for new operating lease liabilities
$208,767 $225,345 $395,428 $509,696 

Cash dividends. The Company’s Board of Directors declared a quarterly cash dividend of $0.285 per common share in March 2020. In May 2020, the Company suspended its quarterly dividends due to the economic uncertainty stemming from the COVID-19 pandemic. On March 2, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.285 per common share, payable on March 31, 2021, resuming quarterly dividends. The Company’s Board of Directors also declared cash dividends of $0.285 per common share in May 2021 and August 2021.

In November 2021, the Company’s Board of Directors declared a cash dividend of $0.285 per common share, payable on December 31, 2021.

Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violation of wage and hour/employment laws and consumer protection laws. Class/representative action litigation remains pending as of October 30, 2021.

The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company may include commercial, product and product safety, consumer, intellectual property,
10


environmental, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, and/or local laws. Actions against the Company are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties.

In the opinion of management, the resolution of pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Recently adopted accounting standards. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (ASC 740). ASU 2019-12 eliminates certain exceptions in ASC 740 related to the methodology for calculating income taxes in an interim period. It also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. The Company adopted ASU 2019-12 on a prospective basis in the first quarter of fiscal 2020. The most significant impact to the Company is the removal of a limit on the tax benefit recognized on pre-tax losses in interim periods. The adoption of this standard did not have a material impact on the Company’s fiscal 2020 results.

Recently issued accounting standards. The Company considers the applicability and impact of all ASUs issued by the FASB. For the three and nine month periods ended October 30, 2021, the ASUs issued by the FASB were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s condensed consolidated financial results.

Note B: Fair Value Measurements

The carrying value of cash and cash equivalents, short- and long-term investments, restricted cash and cash equivalents, restricted investments, accounts receivable, other long-term assets, accounts payable, and other long-term liabilities approximates their estimated fair value.

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The inputs used to measure fair value include: Level 1, observable inputs such as quoted prices in active markets; Level 2, inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, unobservable inputs in which little or no market data exists. This fair value hierarchy requires the Company to develop its own assumptions, maximize the use of observable inputs, and minimize the use of unobservable inputs when measuring fair value. Corporate, U.S. government and agency, and mortgage-backed securities are classified within Level 1 or Level 2 because these securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

The fair value of the Company’s financial instruments are as follows:

($000)October 30, 2021January 30, 2021October 31, 2020
Cash and cash equivalents (Level 1)
$5,259,595 $4,819,293 $4,416,124 
Restricted cash and cash equivalents (Level 1)
$59,946 $134,476 $135,718 

The underlying assets in the Company’s non-qualified deferred compensation program as of October 30, 2021, January 30, 2021, and October 31, 2020 (included in Other long-term assets and in Other long-term liabilities) primarily consist of participant-directed money market, stable value, stock, and bond funds. The fair value measurement for funds with quoted market prices in active markets (Level 1) and for funds without quoted market prices in active markets (Level 2) are as follows:

($000)October 30, 2021January 30, 2021October 31, 2020
Level 1$178,966 $159,116 $134,991 
Level 2  10,391 
Total$178,966 $159,116 $145,382 

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Note C: Management Incentive Plan and Stock-Based Compensation

The Company has incentive compensation programs which provide cash incentive bonuses and performance share awards to key management and employees based on Company and individual performance.

For fiscal 2021, the Compensation Committee of the Board of Directors established the performance measures for determining incentive compensation amounts as based on a combination of profitability-based performance goals and the attainment of specific management priorities related to business challenges from the COVID-19 pandemic, as measured and approved by the Compensation Committee. As of October 30, 2021, the Company has established an accrual for this incentive compensation based on its forecasted attainment of the profitability-based performance goals and the Compensation Committee’s assessment of progress towards achievement of the specific business priorities.

For the fiscal 2020 management incentive bonus plan and performance share awards, the Compensation Committee approved modifications in August 2020 to the performance measurement goals, to be based on the attainment of specific management priorities related to business challenges from the COVID-19 pandemic, as measured and approved by the Compensation Committee, as an alternative to the previously established profitability-based performance goals for 2020.

Stock-based compensation. For the three and nine month periods ended October 30, 2021 and October 31, 2020, the Company recognized stock-based compensation expense as follows:

Three Months EndedNine Months Ended
($000)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Restricted stock$18,841 $17,330 $53,487 $51,450 
Performance awards18,601 8,979 40,000 19,801 
Employee stock purchase plan1,075 1,061 3,288 3,016 
Total$38,517 $27,370 $96,775 $74,267 

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Operations for the three and nine month periods ended October 30, 2021 and October 31, 2020, is as follows:

Three Months EndedNine Months Ended
Statements of Operations Classification ($000)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Cost of goods sold$18,594 $13,767 $48,354 $38,282 
Selling, general and administrative19,923 13,603 48,421 35,985 
Total$38,517 $27,370 $96,775 $74,267 

The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 30, 2021 were $8.4 million and $19.4 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 31, 2020 were $5.1 million and $15.3 million, respectively.

Restricted stock awards. The Company grants shares of restricted stock or restricted stock units to directors, officers, and key employees. The market value of shares of restricted stock and restricted stock units at the date of grant is amortized to expense over the vesting period of generally three to five years.

During the three and nine month periods ended October 30, 2021 and October 31, 2020, shares purchased by the Company for tax withholding totaled 70,488 and 471,081, and 142,350 and 492,171, respectively, and are considered treasury shares which are available for reissuance.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of performance goals during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted.
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As of October 30, 2021, shares related to unvested restricted stock, restricted stock units, and performance share awards totaled 4.0 million shares. A summary of restricted stock, restricted stock units, and performance share award activity for the nine month period ended October 30, 2021, is presented below:

(000, except per share data)Number of
shares
Weighted-average
grant date
fair value
Unvested at January 30, 20214,230 $85.15 
Awarded1,110 121.06 
Released(1,222)75.57 
Forfeited(121)94.90 
Unvested at October 30, 20213,997 $97.79 

The unamortized compensation expense at October 30, 2021, was $193.8 million, which is expected to be recognized over a weighted-average remaining period of 2.1 years. The unamortized compensation expense at October 31, 2020, was $178.2 million, which was expected to be recognized over a weighted-average remaining period of 2.1 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.

Note D: Earnings (Loss) Per Share

The Company computes and reports both basic earnings (loss) per share (“EPS”) and diluted EPS. Basic EPS is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings (loss) by the sum of the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period, except in cases where the effect of the common stock equivalents would be anti-dilutive. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units. For periods of net loss, basic and diluted EPS are the same as the effect of the assumed vesting of restricted stock, restricted stock units, and performance share awards are anti-dilutive.

For the three and nine month periods ended October 30, 2021, approximately 13,200 and 3,000 weighted-average shares were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for the periods presented. For the three month period ended October 31, 2020, approximately 80,600 weighted-average shares were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for the period presented. For the nine month period ended October 31, 2020, basic and diluted EPS were the same due to the Company’s net loss.
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The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:

Three Months EndedNine Months Ended
Shares in (000s)Basic EPSEffect of
dilutive
common stock
equivalents
Diluted
EPS
Basic EPSEffect of
dilutive
common
stock
equivalents
Diluted
EPS
October 30, 2021
Shares351,071 2,010 353,081 352,308 2,169 354,477 
Amount$1.10 $(0.01)$1.09 $3.85 $(0.03)$3.82 
October 31, 2020 
     Shares
352,481 1,976 354,457 352,320  352,320 
     Amount
$0.37 $ $0.37 $(0.43)$ $(0.43)

Note E: Debt

Long-term debt. Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:

($000)October 30, 2021January 30, 2021October 31, 2020
6.530% Series B Senior Notes due 2021
$64,991 $64,910 $64,883 
3.375% Senior Notes due 2024
248,697 248,365 248,256 
4.600% Senior Notes due 2025
695,571 694,624 694,310 
0.875% Senior Notes due 2026
494,508 493,595 493,297 
4.700% Senior Notes due 2027
239,364 239,049 238,944 
4.800% Senior Notes due 2030
132,388 132,262 132,220 
1.875% Senior Notes due 2031
494,551 494,132 493,998 
5.450% Senior Notes due 2050
146,204 146,148 146,129 
Total long-term debt$2,516,274 $2,513,085 $2,512,037 
Less: current portion64,991 64,910  
Total due beyond one year$2,451,283 $2,448,175 $2,512,037 

Revolving credit facilities. The Company's $800 million unsecured revolving credit facility expires in July 2024, and contains a $300 million sublimit for issuance of standby letters of credit. The facility also contains an option allowing the Company to increase the size of its credit facility by up to an additional $300 million, with the agreement of the lenders. Interest on borrowings under this facility is based on LIBOR (or an alternate benchmark rate, if LIBOR is no longer available) plus an applicable margin and is payable quarterly and upon maturity. The revolving credit facility may be extended, at the Company’s option, for up to two additional one year periods, subject to customary conditions.

In March 2020, the Company borrowed $800 million available under its revolving credit facility. Interest on the loan was based on LIBOR plus 0.875% (or 1.76%).

In May 2020, the Company amended its $800 million unsecured revolving credit facility (the “Amended Credit Facility”) to temporarily suspend, for the second and third quarters of fiscal 2020, the Consolidated Adjusted Debt to EBITDAR ratio financial covenant, and to apply a transitional modification to that ratio effective in the fourth quarter of fiscal 2020. In October 2020, the Company repaid in full the $800 million it borrowed under the unsecured revolving credit facility. As of October 30, 2021, the Company had no borrowings or standby letters of credit outstanding under this facility, the $800 million credit facility remains in place and available, and the Company was in compliance with the amended covenant.

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In May 2020, the Company also entered into an additional $500 million 364-day senior revolving credit facility which was scheduled to expire in April 2021. In October 2020, the Company terminated this senior revolving credit facility. The Company had no borrowings under that credit facility at any time.

Senior notes. As of October 30, 2021, the Company had outstanding Series B unsecured Senior Notes in the aggregate principal amount of $65 million held by various institutional investors. The Series B notes are due in December 2021, and bear interest at a rate of 6.530%. Borrowings under these Senior Notes are subject to certain financial covenants that were amended in June 2020. As of October 30, 2021, the Company was in compliance with these covenants.

As of October 30, 2021, the Company also had outstanding unsecured 3.375% Senior Notes due September 2024 (the “2024 Notes”) with an aggregate principal amount of $250 million. Interest on the 2024 Notes is payable semi-annually.

In April 2020, the Company issued an aggregate of $2.0 billion in unsecured senior notes in four tenors as follows: 4.600% Senior Notes due April 2025 (the “2025 Notes”) with an aggregate principal amount of $700 million, 4.700% Senior Notes due April 2027 (the “2027 Notes”) with an aggregate principal amount of $400 million, 4.800% Senior Notes due April 2030 (the “2030 Notes”) with an aggregate principal amount of $400 million, and 5.450% Senior Notes due April 2050 (the “2050 Notes”) with an aggregate principal amount of $500 million. Cash proceeds, net of discounts and other issuance costs, were approximately $1.973 billion. Interest on the 2025, 2027, 2030, and 2050 Notes is payable semi-annually beginning October 2020.

In October 2020, the Company accepted for repurchase approximately $775 million in aggregate principal amount of the senior notes issued in April 2020, pursuant to cash tender offers as follows: $351 million of the 2050 Notes, $266 million of the 2030 Notes, and $158 million of the 2027 Notes. The Company paid approximately $1.003 billion in aggregate consideration (including transaction costs, and accrued and unpaid interest) and recorded an approximately $240 million loss on the early extinguishment for the accepted senior notes.

In October 2020, the Company issued an aggregate of $1.0 billion in unsecured senior notes in two tenors as follows: 0.875% Senior Notes due April 2026 (the “2026 Notes”) with an aggregate principal amount of $500 million and 1.875% Senior Notes due April 2031 (the “2031 Notes”) with an aggregate principal amount of $500 million. Cash proceeds, net of discounts and other issuance costs, were approximately $987.2 million. Interest on the 2026 and 2031 Notes is payable semi-annually beginning April 2021. The Company used the net proceeds from the offering of the 2026 and 2031 Notes to fund the purchase of the accepted senior notes from its tender offers.

As of October 30, 2021, January 30, 2021, and October 31, 2020, total unamortized discount and debt issuance costs were $23.7 million, $26.9 million, and $28.0 million, respectively, and were classified as a reduction of Long-term debt.

All of the Senior Notes are subject to prepayment penalties for early payment of principal.

As of October 30, 2021, January 30, 2021, and October 31, 2020 the aggregate fair value of the eight outstanding series of Senior Notes was approximately $2.6 billion, $2.8 billion, and $2.8 billion, respectively. The fair value is estimated by obtaining comparable market quotes which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance.

The table below shows the components of interest expense and income for the three and nine month periods ended October 30, 2021 and October 31, 2020:

Three Months EndedNine Months Ended
($000)October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Interest expense on long-term debt$22,227 $27,826 66,626 $66,338 
Interest expense on short-term debt 2,565  7,861 
Other interest expense391 2,535 1,012 3,844 
Capitalized interest(3,682)(3,856)(10,511)(9,359)
Interest income(192)(330)(627)(4,423)
Interest expense, net$18,744 $28,740 $56,500 $64,261 

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Note F: Taxes on Earnings (Loss)

On March 27, 2020, the CARES Act was signed into law. The CARES Act made several significant changes to business tax provisions, including modifications for net operating losses, employee retention credits, and deferral of employer payroll tax payments. The modifications for net operating losses eliminate the taxable income limitation for certain net operating losses and allow the carry back of net operating losses arising in 2018, 2019, and 2020 to the five prior tax years, respectively. Subsequently, the Consolidated Appropriations Act of 2021 (“CAA”) and the American Rescue Plan Act (“ARPA”) were signed into law on December 27, 2020 and March 11, 2021, respectively. The CAA and ARPA made several changes to business tax provisions, including increasing and extending the employee retention credits through December 31, 2021, extending certain employment-related tax credits through December 31, 2025, and limiting certain executive compensation deductions, effective fiscal 2027.

The Company’s effective tax rates for the three month periods ended October 30, 2021 and October 31, 2020, were approximately 24% and 4%, respectively. The increase in the effective tax rate of 20% for the three month period ended October 30, 2021 compared to the three month period ended October 31, 2020 was primarily due to fluctuations in pre-tax earnings (loss).

The Company’s effective tax rates for the nine month periods ended October 30, 2021 and October 31, 2020, were approximately 24% and 45%, respectively. The decrease in the effective tax rate of 21% for the nine month period ended October 30, 2021 compared to the nine month period ended October 31, 2020 was primarily due to fluctuations in pre-tax earnings (loss). The Company's effective tax rate is impacted by changes in tax law and accounting guidance, location of new stores, level of earnings, tax effects associated with share-based compensation, and uncertain tax positions.

As of October 30, 2021, January 30, 2021, and October 31, 2020, the reserves for unrecognized tax benefits were $76.9 million, $67.9 million, and $76.1 million, inclusive of $9.8 million, $7.7