Dell 2006 Annual Report Download - page 93
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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Non-vested Restricted Stock Activity — Non-vested restricted stock awards at February 2, 2007 and activities during Fiscal
2007 were as follows:
Weighted-
Number Average
of Grant Date
Shares Fair Value
(in millions) (per share)
Non-vested restricted stock — February 3, 2006 2 $ 34.66
Granted 21 28.36
Vested (1) 28.84
Forfeited (5) 29.29
Non-vested restricted stock — February 2, 2007 17 $ 28.76
Fiscal Years Ended
February 2, February 3, January 28,
2007 2006 2005
(in millions, except per share data)
Weighted-average grant date fair value of restricted stock awards granted $ 28.36 $ 39.70 $ 35.23
Total estimated fair value of restricted stock awards vested $ 16 $ — $ —
At February 2, 2007 $356 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to
non-vested restricted stock awards is expected to be recognized over a weighted-average period of approximately 2.4 years.
Expense Information under SFAS 123(R)
For Fiscal 2007, stock-based compensation expense, net of income taxes, was allocated as follows:
Fiscal Year Ended
February 2,
2007
(in millions)
Stock-based compensation expense:
Cost of net revenue $ 59
Operating expenses 309
Stock-based compensation expense before taxes 368
Income tax benefit (110)
Stock-based compensation expense, net of income taxes $ 258
Prior to the adoption of SFAS 123(R), net income included compensation expense related to restricted stock awards but did
not include stock-based compensation expense for employee stock options or the purchase discount under Dell's ESPP.
Total stock-based compensation expense was $368 million for the fiscal year ended February 2, 2007. As a result of
adopting SFAS 123(R), income before income taxes and net income were lower by $272 million and $191 million,
respectively, for Fiscal 2007 as compared to Fiscal 2006, than if Dell had not adopted SFAS 123(R). The impact on both
basic and diluted earnings per share for the fiscal year ended February 2, 2007 was $0.08 per share. The remaining
$96 million of pre-tax stock compensation expense for the fiscal year ended February 2, 2007, is associated with restricted
stock awards that, consistent with APB 25, are expensed over the associated vesting period. Stock-based compensation
expense recognized for Fiscal 2007 is based on awards expected to vest, reduced for estimated forfeitures. SFAS 123(R)
requires forfeitures to be estimated at the time of grant and revised, if
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