Cisco 2014 Annual Report Download - page 120
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(c) Summary of Share-Based Compensation Expense
Share-based compensation expense consists primarily of expenses for stock options, stock purchase rights, restricted stock,
and restricted stock units granted to employees. The following table summarizes share-based compensation expense (in
millions):
Years Ended July 26, 2014 July 27, 2013 July 28, 2012
Cost of sales—product .............................................. $45 $40 $53
Cost of sales—service ............................................... 150 138 156
Share-based compensation expense in cost of sales ........................ 195 178 209
Research and development ........................................... 411 286 401
Sales and marketing ................................................. 549 484 588
General and administrative ........................................... 198 175 203
Restructuring and other charges ....................................... (5) (3) —
Share-based compensation expense in operating expenses ................... 1,153 942 1,192
Total share-based compensation expense ................................ $1,348 $1,120 $1,401
Income tax benefit for share-based compensation ......................... $ 324 $ 285 $ 335
As of July 26, 2014, the total compensation cost related to unvested share-based awards not yet recognized was $2.4 billion,
which is expected to be recognized over approximately 2.3 years on a weighted-average basis.
(d) Share-Based Awards Available for Grant
A summary of share-based awards available for grant is as follows (in millions):
Years Ended July 26, 2014 July 27, 2013 July 28, 2012
Balance at beginning of fiscal year ..................................... 228 218 255
Restricted stock, stock units, and other share-based awards granted ........... (98) (102) (95)
Share-based awards canceled/forfeited/expired ........................... 36 115 64
Additional shares reserved ........................................... 135 ——
Shares withheld for taxes and not issued ................................. 6——
Other ............................................................ 3(3) (6)
Balance at end of fiscal year .......................................... 310 228 218
As reflected in the preceding table, for each share awarded as restricted stock or subject to a restricted stock unit award under
the 2005 Plan, an equivalent of 1.5 shares was deducted from the available share-based award balance. For restricted stock
units that were awarded with vesting contingent upon the achievement of future financial performance or market-based
metrics, the maximum awards that can be achieved upon full vesting of such awards were reflected in the preceding table.
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