Best Buy 2014 Annual Report Download - page 91

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86
Market-Based Share Awards
The fair value of market-based share awards is determined based on generally accepted valuation techniques and the closing
market price of our stock on the date of grant. A summary of the status of our nonvested market-based share awards at
February 1, 2014, and changes during fiscal 2014, is as follows:
Market-Based Share Awards Shares
Weighted-
Average Fair
Value per Share
Outstanding at February 2, 2013 805,000 $ 16.76
Granted 1,044,000 $ 24.26
Vested (20,000) $ 19.89
Forfeited/Canceled (193,000) $ 21.82
Outstanding at February 1, 2014 1,636,000 $ 20.91
At February 1, 2014, there was $21 million of unrecognized compensation expense related to nonvested market-based share
awards that we expect to recognize over a weighted-average period of 2.0 years.
Time-Based Share Awards
The fair value of time-based share awards is determined based on the closing market price of our stock on the date of grant.
This value is reduced by the present value of expected dividends during vesting when the employee is not entitled to dividends.
A summary of the status of our nonvested time-based share awards at February 1, 2014, and changes during fiscal 2014, is as
follows:
Time-Based Share Awards Shares
Weighted-
Average Fair
Value per Share
Outstanding at February 2, 2013 7,751,000 $ 21.05
Granted 3,433,000 $ 22.99
Vested (2,642,000) $ 22.06
Forfeited/Canceled (1,477,000) $ 21.61
Outstanding at February 1, 2014 7,065,000 $ 21.49
At February 1, 2014, there was $93 million of unrecognized compensation expense related to nonvested time-based share
awards that we expect to recognize over a weighted-average period of 1.8 years.
Earnings per Share
We compute our basic earnings per share based on the weighted-average number of common shares outstanding, and our
diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of
additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive
securities include stock options, nonvested share awards and shares issuable under our employee stock purchase plan, as well
as common shares that would have resulted from the assumed conversion of our convertible debentures. During the fourth
quarter of fiscal 2012, we repurchased and redeemed all of the remaining outstanding convertible debentures. Since the
potentially dilutive shares related to the convertible debentures are included in the computation, the related interest expense, net
of tax, is added back to net earnings, as the interest would not have been paid if the convertible debentures had been converted
to common stock. Nonvested market-based share awards and nonvested performance-based share awards are included in the
average diluted shares outstanding each period if established market or performance criteria have been met at the end of the
respective periods.