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Annual
Report
Stock-Based Compensation Expense
Employee stock-based compensation expense recognized during the fiscal years ended March 31, 2013, 2012 and
2011 was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures.
In subsequent periods, if actual forfeitures differ from those estimates, an adjustment to stock-based
compensation expense will be recognized at that time.
The following table summarizes stock-based compensation expense resulting from stock options, restricted stock,
restricted stock units and the ESPP included in our Consolidated Statements of Operations (in millions):
Year Ended March 31,
2013
2012
2011
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2
$
2
$
2
Research and development
(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
103
107
Marketing and sales
(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
27
23
General and administrative
(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
38
42
Restructuring and other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--
--
2
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$164
$170
$176
(a)
During the fourth quarter of fiscal year 2013, we reviewed our operating expenses and reclassified certain
amounts, primarily headcount and facilities costs, to align with our current operating structure. As a result,
we also reclassified the related prior year stock-based compensation expense amounts within our
Consolidated Statements of Operations for comparability purposes. These reclassifications did not affect the
Company's total stock-based compensation expense.
During the fiscal years ended March 31, 2013, 2012 and 2011, we did not recognize any provision for or benefit
from income taxes related to our stock-based compensation expense.
As of March 31, 2013, our total unrecognized compensation cost related to stock options was $5 million and is
expected to be recognized over a weighted-average service period of 2.1 years. As of March 31, 2013, our total
unrecognized compensation cost related to restricted stock and restricted stock units (collectively referred to as
"restricted stock rights") was $221 million and is expected to be recognized over a weighted-average service
period of 1.7 years. Of the $221 million of unrecognized compensation cost, $7 million relates to market-based
restricted stock units.
For fiscal year ended March 31, 2013, we recognized $1 million of tax expense from the exercise of stock
options, net of $1 million of deferred tax write-offs. There is no tax benefit related to stock-based compensation
reported in the financing activities on our Consolidated Statements of Cash Flows. For the fiscal year ended
March 31, 2012, we recognized $3 million of tax benefit from the exercise of stock options, net of $1 million of
deferred tax write-offs; of this amount $4 million of excess tax benefit related to stock-based compensation was
reported in the financing activities on our Consolidated Statements of Cash Flows. For the fiscal year ended
March 31, 2011, we recognized $2 million of tax expense from the exercise of stock options, net of $3 million of
deferred tax write-offs; of this amount $1 million of excess tax benefit related to stock-based compensation was
reported in the financing activities on our Consolidated Statements of Cash Flows.
Summary of Plans and Plan Activity
Equity Incentive Plans
Our 2000 Equity Incentive Plan (the "Equity Plan") allows us to grant options to purchase our common stock and
to grant restricted stock, restricted stock units and stock appreciation rights to our employees, officers and
directors. Pursuant to the Equity Plan, incentive stock options may be granted to employees and officers and non-
qualified options may be granted to employees, officers and directors, at not less than 100 percent of the fair
market value on the date of grant.
97