Best Buy 2016 Annual Report Download - page 89

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81
Market-Based Share Awards Shares
Weighted-
Average Fair
Value per Share
Outstanding at January 31, 2015 1,704,000 $ 24.16
Granted 758,000 $ 31.48
Vested (914,000) $ 16.73
Forfeited/Canceled (86,000) $ 28.85
Outstanding at January 30, 2016 1,462,000 $ 32.33
At January 30, 2016, there was $19 million of unrecognized compensation expense related to nonvested market-based share
awards that we expect to recognize over a weighted-average period of 1.8 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 January 30, 2016, and changes during fiscal 2016, is as
follows:
Time-Based Share Awards Shares
Weighted-
Average Fair
Value per Share
Outstanding at January 31, 2015 5,543,000 $ 24.40
Granted 2,683,000 $ 38.72
Vested (2,503,000) $ 23.10
Forfeited/Canceled (620,000) $ 29.98
Outstanding at January 30, 2016 5,103,000 $ 31.89
At January 30, 2016, there was $85 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.
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.
At January 30, 2016, options to purchase 14.2 million shares of common stock were outstanding as follows (shares in millions):
Exercisable Unexercisable Total
Shares %
Weighted-
Average Price
per Share Shares %
Weighted-
Average Price
per Share Shares %
Weighted-
Average Price
per Share
In-the-money 4.2 36% $ 24.73 1.3 52% $ 27.45 5.5 39% $ 25.37
Out-of-the-money 7.5 64% $ 44.15 1.2 48% $ 40.51 8.7 61% $ 43.62
Total 11.7 100% $ 37.09 2.5 100% $ 33.87 14.2 100% $ 36.51
The computation of dilutive shares outstanding excludes the out-of-the-money stock options because such outstanding options'
exercise prices were greater than the average market price of our common shares and, therefore, the effect would be anti-
dilutive (i.e., including such options would result in higher earnings per share).