Medtronic 2012 Annual Report Download - page 119

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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
102
Stock Options The following table summarizes all stock option activity, including activity from options
assumed or issued as a result of acquisitions, during fiscal years 2012, 2011, and 2010:
Fiscal Year
___________________________________________________________________________________
2012 2011 2010
_________________________ _________________________ _________________________
Wtd. Avg. Wtd. Avg. Wtd. Avg.
Options (in Exercise Options (in Exercise Options (in Exercise
thousands) Price thousands) Price thousands) Price
___________ __________ ___________ __________ ___________ __________
Beginning balance . . . . . . . . . . 84,652 $ 45.23 89,613 $ 46.13 93,394 $ 46.57
Granted . . . . . . . . . . . . . . . . . . . 4,634 34.93 6,371 37.59 7,863 35.81
Exercised . . . . . . . . . . . . . . . . . . (1,218) 34.95 (627) 32.84 (3,126) 32.96
Canceled . . . . . . . . . . . . . . . . . . (13,478) 44.98 (10,705) 48.91 (8,518) 46.27
___________ ___________ ___________
Outstanding at year-end . . . . . 74,590 44.80 84,652 45.23 89,613 46.13
___________ ___________ ___________
___________ ___________ ___________
Exercisable at year-end . . . . . . 60,833 46.73 66,286 47.24 67,944 48.24
___________ ___________ ___________
For options outstanding and exercisable at April 27, 2012, the weighted average remaining contractual
life was 4.48 years and 3.66 years, respectively. The total intrinsic value, calculated as the closing stock price
at year-end less the option exercise price, of options exercised during fiscal years 2012, 2011, and 2010 was
$5 million, $4 million, and $19 million, respectively. For options outstanding and exercisable at April 27,
2012, the total intrinsic value of in-the-money options was $44 million and $22 million, respectively. The
Company issues new shares when stock option awards are exercised. Cash received from the exercise of
stock options for the fiscal year ended April 27, 2012 was $43 million. The Company’s tax benefit related to
the exercise of stock options for fiscal year 2012 was $2 million. Unrecognized compensation expense related
to outstanding stock options as of April 27, 2012 was $63 million and is expected to be recognized over a
weighted average period of 2.1 years and will be adjusted for any future changes in estimated forfeitures.
Restricted Stock Awards The following table summarizes restricted stock award activity during fiscal
years 2012, 2011, and 2010:
Fiscal Year
___________________________________________________________________________________
2012 2011 2010
_________________________ _________________________ _________________________
Wtd. Avg. Wtd. Avg. Wtd. Avg.
Awards (in Grant Awards (in Grant Awards (in Grant
thousands) Price thousands) Price thousands) Price
___________ __________ ___________ __________ ___________ __________
Nonvested, beginning balance 9,207 $ 40.42 8,909 $ 42.67 8,346 $ 43.88
Granted . . . . . . . . . . . . . . . . . . . 3,785 35.60 2,682 37.52 2,783 34.92
Vested . . . . . . . . . . . . . . . . . . . . (2,194) 44.74 (1,809) 47.28 (1,632) 35.36
Forfeited . . . . . . . . . . . . . . . . . . (818) 38.46 (575) 40.12 (588) 43.52
___________ ___________ ___________
Nonvested at year-end . . . . . . . 9,980 37.80 9,207 40.42 8,909 42.67
___________ ___________ ___________
___________ ___________ ___________
Unrecognized compensation expense related to restricted stock awards as of April 27, 2012 was
$155 million and is expected to be recognized over a weighted average period of 2.7 years and will be
adjusted for any future changes in estimated forfeitures.
14. Income Taxes
The provision for income taxes is based on earnings before income taxes reported for financial
statement purposes. The components of earnings from continuing operations before income taxes, based on
tax jurisdiction, are as follows:
Fiscal Year
_________________________________________
(in millions) 2012 2011 2010
___________ ____________ ___________ ____________
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,620 $ 1,391 $ 1,538
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,525 2,273 2,406
____________ ___________ ____________
Earnings from continuing operations before income taxes . . $ 4,145 $ 3,664 $ 3,944
____________ ___________ ____________
____________ ___________ ____________