EXPRESS, INC. - 10-Q filing on 2015-09-03

Lease Financing Obligations	6 Months Ended
Lease Financing Obligations	Aug. 01, 2015
Leases [Abstract]
Lease Financing Obligations	Lease Financing Obligations In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved in the construction of structural improvements or takes construction risk prior to commencement of a lease, it is deemed the owner of the project for accounting purposes. Therefore, the Company records an asset in Property and Equipment on the unaudited Consolidated Balance Sheets, including any capitalized interest costs, and related liabilities in accrued interest and lease financing obligations in Other Long-Term Liabilities on the unaudited Consolidated Balance Sheets, for the replacement cost of the Company's portion of the pre-existing building plus the amount of construction costs incurred by the landlord as of the balance sheet date. The initial lease terms of the lease arrangements, for which the Company is considered the owner, are expected to expire in 2023 and 2030. The net book value of landlord funded construction, replacement cost of pre-existing property, and capitalized interest in Property and Equipment on the unaudited Consolidated Balance Sheets was $69.2 million and $71.0 million, as of August 1, 2015 and January 31, 2015, respectively. There was also $70.2 million and $70.9 million of lease financing obligations as of August 1, 2015 and January 31, 2015, respectively, in Other Long-Term Liabilities on the unaudited Consolidated Balance Sheets. Transactions involving the initial recording of these assets and liabilities are classified as non-cash items for purposes of the unaudited Consolidated Statements of Cash Flows. Rent expense relating to the land is recognized on a straight-line basis over the lease term. The Company does not report rent expense for the portion of the rent payment determined to be related to the lease obligations which are owned for accounting purposes. Rather, this portion of the rent payment under the lease is recognized as interest expense and a reduction of the lease financing obligations.