Yahoo 2009 Annual Report Download - page 105

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
Restricted stock awards activity for the year ended December 31, 2009 is summarized as follows (in thousands,
except per share amounts):
Shares
Weighted Average
Grant Date Fair Value
Awarded and unvested at December 31, 2008 ............................. 31,133 $27.97
Granted ........................................................... 17,065 $12.82
Vested ........................................................... (14,367) $24.93
Forfeited .......................................................... (7,642) $23.26
Awarded and unvested at December 31, 2009 ......................... 26,189 $21.14
As of December 31, 2009, there was $211 million of unamortized stock-based compensation cost related to
unvested restricted stock awards, which is expected to be recognized over a weighted average period of 2.0 years.
The total fair value of restricted stock awards vested during the years ended December 31, 2007, 2008, and 2009
was $27 million, $301 million, and $375 million, respectively.
During the year ended December 31, 2009, 14.4 million previously granted restricted stock awards and restricted
stock units vested. A majority of these vested restricted stock awards and restricted stock units were net share
settled. The Company withheld 4.7 million equivalent shares based upon the Company’s closing stock price on
the vesting date to settle the employees’ minimum statutory obligation for the applicable income and other
employment taxes. The Company then remitted the cash to the appropriate taxing authorities.
Total payments for the employees’ tax obligations to the relevant taxing authorities were $73 million for the year
ended December 31, 2009 and are reflected as a financing activity within the consolidated statements of cash
flows. Upon the vesting of shares of certain restricted stock awards, 0.3 million shares were reacquired by the
Company to satisfy the tax withholding obligations and $5 million was recorded as treasury stock. Payments of
$68 million related to the net share settlement of 4.4 million shares of restricted stock units had the effect of
share repurchases by the Company as they reduced the number of shares that would have otherwise been issued
on the vest date and were recorded as a reduction of additional paid-in-capital.
In the year ended December 31, 2008, the Company reversed an amount of $51 million of stock-based
compensation expense related to unvested stock awards as a result of an increase in its estimated forfeiture rate
assumption based on updated information on actual forfeitures.
In 2007, 2008, and 2009, $35 million, $125 million, and $108 million, respectively, of excess tax benefits from
stock-based awards for options exercised in current and prior periods were included as a source of cash flows
from financing activities. These excess tax benefits represent the reduction in income taxes otherwise payable
during the period, attributable to the actual gross tax benefits in excess of the expected tax benefits for options
exercised in current and prior periods. The Company has accumulated excess tax deductions relating to stock
options exercised prior to January 1, 2006 available to reduce income taxes otherwise payable. To the extent such
deductions reduce income taxes payable in the current year, they are reported as financing activities in the
consolidated statements of cash flows.
During 2007, the Company determined that income tax benefits of $127 million ($92 million related to 2006 and
the remainder related to earlier years) should not have been recorded to additional paid-in capital as tax benefits
from stock-based awards because for financial statement ordering purposes, the tax benefits should have been
attributed to the utilization of acquired net operating losses first or should not have been recognized at all because
the underlying tax amounts should not have been offset by tax benefits from stock-based awards. As a result, in
the 2007 statement of cash flows, the Company reduced by $92 million, excess tax benefits from stock-based
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