Equity-Based Compensation (Tables)

12 Months Ended

Oct. 01, 2011

Contractual Terms for Stock Option Grants

The following table summarizes contractual terms for our stock option grants:


Grant dates		Contractual Term
Prior to December 2005		10 years
January 2005 through December 2010		7 years
After December 2010		10 years

Summary of Vesting Terms

The following table summarizes vesting terms for our RSUs:


Grant dates		Vesting Terms
RSUs:
Prior to January 2009		50% on each of the second and fourth anniversaries of the grant date

Effective January 2009		Ratably over four years

Performance RSUs:
Prior to January 2010		50% on each of the second and fourth anniversaries of the grant date subject to achieving market and/or performance conditions

Effective January 2010		Fully after three years, subject to achieving performance conditions

Weighted Average Assumptions Used in the Option Valuation Model

In fiscal years 2011, 2010 and 2009, the weighted average assumptions used in the option-valuation model were as follows:


	2011		2010		2009
Risk-free interest rate		3.2%		3.5%		2.0%
Expected volatility		28%		32%		47%
Dividend yield		1.15%		1.41%		1.19%
Termination rate		2.5%		2.5%		7.5%
Exercise multiple		1.40		1.40		1.39

Impact of Stock Options/Rights and RSUs on Income

The impact of stock options/rights and RSUs on income for fiscal 2011, 2010 and 2009 was as follows:


	2011		2010		2009
Stock option/rights compensation expense ⁽¹⁾	$	133	$	142	$	154
RSU compensation expense		300		249		207

Total equity-based compensation expense ⁽²⁾		433		391		361
Tax impact		(151)		(145)		(134)

Reduction in net income	$	282	$	246	$	227


Equity-based compensation expense capitalized during the period	$	66	$	79	$	109


Tax benefit reported in cash flow from financing activities	$	124	$	76	$	4

⁽¹⁾	Includes stock appreciation rights issued in connection with the acquisition of Playdom

⁽²⁾

Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs. Amortization of previously capitalized equity-based compensation totaled $57 million, $131 million and $96 million in fiscal 2011, 2010 and 2009, respectively.

Information about Stock Option Transactions

The following table summarizes information about stock option transactions (shares in millions):


	2011
	Shares		Weighted Average Exercise Price
Outstanding at beginning of year		119	$	27.73
Awards forfeited		(3)		28.71
Awards granted		11		39.62
Awards exercised		(42)		26.79
Awards expired/cancelled		(3)		21.62

Outstanding at end of year		82		29.20

Exercisable at end of year		48		27.74

Information about Stock Options Vested and Expected to Vest

The following tables summarize information about stock options vested and expected to vest at October 1, 2011 (shares in millions):


	Vested
Range of Exercise Prices	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Years of Contractual Life
$ 0 — $ 15		1	$	12.53		1.5
$ 16 — $ 20		4		18.37		2.8
$ 21 — $ 25		12		23.50		2.3
$ 26 — $ 30		17		28.81		3.2
$ 31 — $ 35		14		33.68		3.2

		48


	Expected to Vest
Range of Exercise Prices	Number of Options ⁽¹⁾		Weighted Average Exercise Price		Weighted Average Remaining Years of Contractual Life
$ 0 — $ 20		1	$	18.75		4.5
$21 — $ 25		5		20.87		4.3
$26 — $ 30		9		29.22		3.7
$31 — $ 35		8		31.21		8.0
$36 — $ 40		8		39.61		9.3

		31

⁽¹⁾	Number of options expected to vest is total unvested options less estimated forfeitures.

Information about RSU Transactions

The following table summarizes information about RSU transactions (shares in millions):


	2011
	Units		Weighted Average Grant-Date Fair Value
Unvested at beginning of year		33	$	27.99
Granted		13		39.62
Vested		(11)		28.34
Forfeited		(3)		30.43

Unvested at end of year		32		32.34