Equity-Based Compensation (Tables)

12 Months Ended

Sep. 29, 2012

Contractual Terms for Stock Option Grants

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


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

Vesting Terms for Restricted Stock Units

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 market and/or performance conditions

Weighted Average Assumptions used in Option-Valuation Model

In fiscal years 2012, 2011 and 2010, the weighted average assumptions used in the option-valuation model were as follows:


	2012		2011		2010
Risk-free interest rate		2.0%		3.2%		3.5%
Expected volatility		31%		28%		32%
Dividend yield		1.56%		1.15%		1.41%
Termination rate		2.7%		2.5%		2.5%
Exercise multiple		1.41		1.40		1.40

Impact of Stock Options/Rights and Restricted Stock Units on Income

The impact of stock options/rights and RSUs on income for fiscal 2012, 2011 and 2010 was as follows:


	2012		2011		2010
Stock option/rights compensation expense ⁽¹⁾	$	115	$	133	$	142
RSU compensation expense		310		300		249

Total equity-based compensation expense ⁽²⁾		425		433		391
Tax impact		(145)		(151)		(145)

Reduction in net income	$	280	$	282	$	246


Equity-based compensation expense capitalized during the period	$	56	$	66	$	79


Tax benefit reported in cash flow from financing activities	$	122	$	124	$	76

⁽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 $59 million, $57 million and $131 million in fiscal 2012, 2011 and 2010, respectively.

Information about Stock Option Transactions

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


	2012
	Shares		Weighted Average Exercise Price
Outstanding at beginning of year		82	$	29.20
Awards forfeited		(3)		31.39
Awards granted		11		39.13
Awards exercised		(36)		27.77
Awards expired/cancelled		—		—

Outstanding at end of year		54		32.02

Exercisable at end of year		26		28.82

Information about Stock Options Vested and Expected to Vest

The following tables summarize information about stock options vested and expected to vest at September 29, 2012 (shares in millions):


	Vested
Range of Exercise Prices	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Years of Contractual Life
$ 0 — $ 20		2	$	18.07		2.1
$ 21 — $ 25		5		22.72		2.2
$ 26 — $ 30		10		28.99		2.6
$ 31 — $ 35		8		33.17		3.1
$ 36 — $ 45		1		39.63		8.3

		26


	Expected to Vest
Range of Exercise Prices	Number of Options ⁽¹⁾		Weighted Average Exercise Price		Weighted Average Remaining Years of Contractual Life
$ 0 — $ 25		2	$	20.78		3.3
$ 26 — $ 30		3		28.61		3.1
$ 31 — $ 35		4		31.18		7.3
$ 36 — $ 40		14		39.12		8.9
$ 41 — $ 50		1		46.28		9.6

		24

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

Information about Restricted Stock Unit Transactions

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


	2012
	Units		Weighted Average Grant-Date Fair Value
Unvested at beginning of year		32	$	32.34
Granted		10		39.39
Vested		(12)		30.63
Forfeited		(3)		32.80

Unvested at end of year		27		35.49