v2.4.0.6
Stockholders' Equity
 9 Months Ended
Jan. 27, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

10. Stockholders' Equity

Stock Options

A summary of the activity under our stock option plans and agreements is as follows (in millions, except for the exercise price and contractual term):

 

     Number
of  Shares		     Weighted-
Average
Exercise
Price		      Weighted-
Average
Remaining
Contractual Term
(Years)		      Aggregate
Intrinsic
Value		  
          
          
          
          

Outstanding at April 29, 2011

      24.5      $ 26.62         

Options granted

      2.1        51.36         

Options exercised

      (3.0 )      20.98         

Options forfeitures and cancellations

      (0.7 )      35.96         
  

 

 

          

Outstanding at January 27, 2012

      22.9        29.28         3.91       $ 239.6   
  

 

 

          

Options vested and expected to vest as of January 27, 2012

      22.1        28.86         3.86         236.7   

Exercisable at January 27, 2012

      15.1        25.64         3.25         188.9   

The aggregate intrinsic value represents the pre-tax difference between the exercise price of stock options and the quoted market price of our stock on that day for all in-the-money options. As of January 27, 2012, the total unrecognized compensation expense related to stock options was $80.8 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.2 years.

Additional information related to our stock options is summarized below (in millions, except per share information):

 

     Three Months Ended      Nine Months Ended  
     January 27,
2012		      January 28,
2011		      January 27,
2012		      January 28,
2011		  

Weighted-average fair value per share granted

    $ 13.26       $ 18.79       $ 16.88       $ 15.72   

Weighted-average fair value per share of options assumed in acquisition

      N/A         N/A         N/A       $ 21.15   

Intrinsic value of options exercised

    $ 21.0       $ 79.4       $ 71.6       $ 294.0   

Proceeds received from the exercise of stock options

    $ 19.5       $ 53.9       $ 62.2       $ 278.8   

Fair value of options vested

    $ 18.1       $ 23.1       $ 56.8       $ 77.5   

N/A - Not Applicable

Restricted Stock Units

The following table summarizes activity related to our restricted stock units (RSUs) (in millions, except for the fair value):

 

     Number of
Shares		     Weighted-
Average
Grant Date
Fair Value		  

Outstanding at April 29, 2011

      10.1      $ 35.79   

RSUs granted

      5.3        48.84   

RSUs vested

      (3.1 )      29.92   

RSUs forfeitures and cancellations

      (0.7 )      39.90   
  

 

 

    

Outstanding at January 27, 2012

      11.6        43.10   
  

 

 

    

 

RSUs are converted into common stock upon vesting. Upon the vesting of RSUs, we primarily use the net share settlement approach, where a portion of the shares are withheld and retired as settlement of statutory employee withholding taxes, which decreases the shares issued to the employee by a corresponding value. The number and value of the shares netted for employee taxes are summarized in the table below (in millions):

 

     Three Months Ended      Nine Months Ended  
     January 27,
2012		      January 28,
2011		      January 27,
2012		      January 28,
2011		  

Shares withheld for taxes

      0.4         0.3         1.0         0.8   

Fair value of shares withheld and retired

    $ 16.4       $ 15.9       $ 44.2       $ 35.5   

As of January 27, 2012, the total unrecognized compensation expense related to RSUs was $340.8 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.7 years.

Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan (ESPP), employees are entitled to purchase shares of our common stock at a 15% discount from the quoted market price of our common stock at certain specified dates over a two-year period. Additional information related to our purchase rights issued under the ESPP is provided below (in millions, except per share information):

 

     Three Months Ended      Nine Months Ended  
     January 27,
2012		      January 28,
2011		      January 27,
2012		      January 28,
2011		  

Weighted-average fair value per right granted

    $ 12.93       $ 16.54       $ 13.34       $ 15.35   

Shares issued under the ESPP

      1.5         3.2         2.6         6.0   

Weighted-average price per share issued

    $ 31.03       $ 11.87       $ 34.53       $ 11.50   

Stock-Based Compensation Expense

Stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended January 27, 2012 and January 28, 2011, respectively, is as follows (in millions):

 

     Three Months Ended      Nine Months Ended  
     January 27,
2012		      January 28,
2011		      January 27,
2012		      January 28,
2011		  

Cost of product revenues

    $ 1.6       $ 1.0       $ 4.1       $ 2.7   

Cost of service revenues

      5.7         3.6         13.8         10.6   

Sales and marketing

      37.5         21.3         96.5         59.2   

Research and development

      22.8         11.3         57.0         31.6   

General and administrative

      9.1         7.8         26.4         22.9   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total stock-based compensation expense

    $ 76.7       $ 45.0       $ 197.8       $ 127.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

The following table summarizes stock-based compensation associated with each type of award (in millions):

 

     Three Months Ended      Nine Months Ended  
     January 27,
2012		      January 28,
2011		      January 27,
2012		      January 28,
2011		  

Employee stock options

    $ 13.8       $ 13.8       $ 43.0       $ 39.7   

RSUs and restricted stock awards

      42.1         23.9         115.4         61.7   

ESPP

      20.8         7.3         39.4         25.6   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total stock-based compensation expense

    $ 76.7       $ 45.0       $ 197.8       $ 127.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total income tax benefits associated with employee stock transactions and recognized in stockholders' equity were as follows (in millions):

 

     Nine Months Ended  
     January 27,
2012		      January 28,
2011		  

Income tax benefits associated with employee stock transactions

    $ 74.7       $ 74.9   

 

Valuation Assumptions

The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model, assuming no expected dividends and the following weighted-average assumptions:

 

     Stock Options  
     Three Months Ended     Nine Months Ended  
     January 27,
2012		     January 28,
2011		     January 27,
2012		     January 28,
2011		  

Expected term in years

      4.8        4.8        4.8        4.8   

Risk-free interest rate

      0.84 %      2.07 %      1.54 %      1.99 % 

Volatility

      43 %      37 %      36 %      37 % 

 

     ESPP  
     Three Months Ended     Nine Months Ended  
     January 27,
2012		     January 28,
2011		     January 27,
2012		     January 28,
2011		  

Expected term in years

      1.2        1.3        1.2        1.2   

Risk-free interest rate

      0.18 %      0.35 %      0.19 %      0.43 % 

Volatility

      45 %      39 %      44 %      39 % 

Stock Repurchase Program

During the nine months ended January 27, 2012, 14.6 million shares of our common stock were repurchased as described below. Since the May 13, 2003 inception of our stock repurchase program through January 27, 2012, we repurchased a total of 119.0 million shares of our common stock at an average price of $29.65 per share, for an aggregate purchase price of $3.5 billion. As of January 27, 2012, our Board of Directors had authorized the repurchase of up to $4.0 billion of our common stock under this stock repurchase program. As of January 27, 2012, the remaining authorized amount for stock repurchases under this program was $0.5 billion with no termination date. The stock repurchase program may be suspended or discontinued at any time.

Accelerated Share Repurchase Agreements

On July 8, 2011, we entered into a collared accelerated share repurchase agreement (ASR) with Bank of America, N.A, under which we prepaid $200.0 million to purchase shares of our common stock. The aggregate number of shares ultimately purchased was determined based on the volume weighted-average share price of our common stock over a specified period of time. The contract was settled in August 2011. The total number of shares repurchased and retired under this ASR was 4.1 million shares at a price of $48.30.

On August 19, 2011, we entered into an ASR with Wells Fargo Bank, National Association, under which we prepaid $400.0 million to purchase shares of our common stock. The aggregate number of shares ultimately purchased was determined based on the volume weighted-average share price of our common stock over a specified period of time. The contract was settled in November 2011. The total number of shares repurchased and retired under this ASR was 10.5 million shares at a price of $38.08.

The value of the contracts was allocated to the cost of the shares repurchased and to the value of the ASR forward contracts as follows for the nine months ended January 27, 2012 (in millions):

 

     Shares of
Common
Stock		     Additional
Paid-in
Capital		     Retained
Earnings		     Total
Repurchase
Activity		  

Repurchase and retirement of common stock

      (14.6 )    $ (125.8 )    $ (474.1 )    $ (599.9 ) 

Value of ASR forward contracts

        (0.1 )        (0.1 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total cash payment

      (14.6 )    $ (125.9 )    $ (474.1 )    $ (600.0 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Comprehensive Income

The components of accumulated other comprehensive income, net of related immaterial tax effects, were as follows (in millions):

 

     January 27,
2012		     April 29,
2011		  

Accumulated translation adjustments

    $ 4.2      $ 11.6   

Accumulated unrealized gains on available-for-sale investments

      1.5        3.4   

Accumulated unrealized gains (losses) on derivatives qualifying as cash flow hedges

      1.9        (2.2 ) 

Accumulated defined benefit obligation adjustments

      (3.0 )      0.0   
  

 

 

    

 

 

  

Total accumulated other comprehensive income

    $ 4.6      $ 12.8   
  

 

 

    

 

 

  

 

The components of comprehensive income, net of related immaterial tax effects, were as follows (in millions):

 

     Three Months Ended     Nine Months Ended  
     January 27,
2012		     January 28,
2011		     January 27,
2012		     January 28,
2011		  

Net income

    $ 119.6      $ 186.4      $ 424.7      $ 512.5   

Change in currency translation adjustments

      (4.3 )      0.4        (7.4 )      4.7   

Change in unrealized gains (losses) on available-for-sale investments

      3.5        (6.4 )      (1.9 )      (0.1 ) 

Change in unrealized gains (losses) on derivatives qualifying as cash flow hedges

      1.4        2.2        4.1        (0.2 ) 

Change in defined benefit obligation adjustments

      (3.0 )      0.0        (3.0 )      0.0   
  

 

 

    

 

 

    

 

 

    

 

 

  

Comprehensive income

    $ 117.2      $ 182.6      $ 416.5      $ 516.9