Shareholders' Equity

6 Months Ended

Jul. 28, 2012

Shareholders' Equity

Note 10. Shareholders’ Equity

Stock Plans

Activity under the Company’s stock option plans for the six months ended July 28, 2012 is summarized below (in thousands, except per share amounts):

	Time-Based Options					Market-Based Options					Total
	Number of Shares			Weighted Average Exercise  Price		Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise  Price
Balance at January 28, 2012		52,467		$	12.53		3,124		$	15.43		55,591		$	12.70
Granted		6,855		$	14.75		—		$	—		6,855		$	14.75
Exercised		(3,117	)	$	7.23		—		$	—		(3,117	)	$	7.23
Canceled/Forfeited		(963	)	$	16.20		(60	)	$	15.43		(1,023	)	$	16.16
Balance at July 28, 2012		55,242		$	13.04		3,064		$	15.43		58,306		$	13.17
Vested or expected to vest at July 28, 2012		53,650		$	13.00
Exercisable at July 28, 2012		41,521		$	12.89

For time-based stock options vested and expected to vest at July 28, 2012, the aggregate intrinsic value was $82.7 million and the weighted average remaining contractual term was 4.9 years. For time-based stock options exercisable at July 28, 2012, the aggregate intrinsic value was $82.1 million and the weighted average remaining contractual term was 4.8 years. There was no aggregate intrinsic value for market-based stock options at July 28, 2012 and the weighted average remaining contractual term of market-based stock options vested and expected to reach the end of the vesting period at July 28, 2012 was 8.8 years. The Company’s closing stock price as reported on the NASDAQ Global Select Market for all in-the-money options as of July 27, 2012 is used to calculate the aggregate intrinsic value.

As of July 28, 2012, the unamortized compensation expense for time-based stock options was $60.1 million and market-based stock options was $8.0 million. The unamortized compensation expense for time-based and market-based stock options will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 2.7 years and 1.4 years, respectively.

Included in the following table is activity related to the non-vested portion of the restricted stock units for the six months ended July 28, 2012 (in thousands, except for prices):

	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance at January 28, 2012		9,646		$	17.38
Granted		6,829		$	15.13
Vested		(2,429	)	$	17.87
Canceled/Forfeited		(809	)	$	18.02
Balance at July 28, 2012		13,237		$	16.09

As of July 28, 2012, compensation costs related to restricted stock units not yet recognized amounted to $165.3 million. The unamortized compensation expense for restricted stock units will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 1.8 years.

Employee Stock Purchase Plan

During the three and six months ended July 28, 2012, a total of 3.3 million shares were issued at a weighted-average price of $10.40 per share under the 2000 Employee Stock Purchase Plan, as amended and restated (the “ESPP”). During the three and six months ended July 30, 2011, a total of 2.4 million shares were issued at a weighted-average price of $12.57 per share under the ESPP. As of July 28, 2012, there was $56.7 million of unrecognized compensation cost related to the ESPP.

Share Repurchase Program

The Company repurchased 19.8 million common shares for $250.3 million in cash during the three months ended July 28, 2012 and 9.1 million common shares for $135.7 million in cash during the three months ended July 30, 2011. The Company repurchased 34.4 million common shares for $473.5 million in cash during the six months ended July 28, 2012 and 59.4 million common shares for $939.2 million in cash during the six months ended July 30, 2011. The repurchased shares were retired immediately after the repurchases were completed. As of July 28, 2012, a total of 127.1 million cumulative shares have been repurchased under the Company’s share repurchase program for a total $1.9 billion in cash and there was $598.2 million remaining available for future share repurchases.

Dividend Program

In May 2012, the Company announced that it had declared the payment of its first quarterly dividend of $0.06 per share. As a result, cash dividends of $33.5 million were paid in the three and six months ended July 28, 2012.

On August 16, 2012, the Company announced that its board of directors declared a cash dividend of $0.06 per share to be paid on October 4, 2012 to shareholders of record as of September 13, 2012. The Company intends to pay a regular quarterly cash dividend on its common shares subject to, among other things, the best interests of its shareholders, the Company’s results of operations, cash balances and future cash requirements, financial condition, statutory requirements of Bermuda law and other factors that the Company’s board of directors may deem relevant.