Buffalo Wild Wings 2011 Annual Report Download - page 46

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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 25, 2011 and December 26, 2010
(Dollar amounts in thousands, except per-share amounts)
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2010 was
$7,712 before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP)
expense of $6,519, $560 and $633, respectively. The related total tax benefit recognized in 2010 was $2,528.
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2009 was
$6,490 before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP)
expense of $5,769, $392 and $329, respectively. The related total tax benefit was $2,298 during 2009.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton (“BSM”) option
valuation model with the following assumptions:
Stock Options
December 25,
2011
December 26,
2010
December 27,
2009
Expected dividend yield 0.0% 0.0% 0.0%
Expected stock price volatility 54.1% 54.4% 59.2%
Risk-free interest rate 2.2% 2.6% 2.0%
Expected life of options 5 years 5 years 5 years
Employee Stock Purchase Plan
December 25,
2011
December 26,
2010
December 27,
2009
Expected dividend yield 0.0% 0.0% 0.0%
Expected stock price volatility 49.2-50.1% 50.0-50.6% 52.7-59.1%
Risk-free interest rate 0.04-0.07% 0.19-0.30% 0.17-0.30%
Expected life of options 0.5 years 0.5 years 0.5 years
The expected term of the options represents the estimated period of time until exercise and is based on historical
experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future
employee behavior. Expected stock price volatility is based on historical volatility of our stock. The risk-free interest rate is
based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. We have not
paid dividends in the past.
(x) New Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-
05 “Presentation of Comprehensive Income.” ASU 2011-05 amends ASC 220 Comprehensive Income to improve the
comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other
comprehensive income. The guidance requires entities to report the components of comprehensive income in either a single,
continuous statement or two separate but consecutive statements. We have determined that the guidance will not have a
material impact to our consolidated financial statements. The guidance will become effective for our fiscal year ending
December 30, 2012.
In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2011-08 “Intangibles – Goodwill and Other.” ASU 2011-08 amends ASC 350 Intangibles – Goodwill and Other to simplify
how an entity tests goodwill for impairment. The guidance allows companies to assess qualitative factors to determine if it is
more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill
impairment test. We have determined that the guidance will not have a material impact to our consolidated financial
statements. The guidance was early adopted and became effective for our fiscal year ending December 25, 2011.
(y) Subsequent Events
There were no subsequent events that required recognition or disclosure.