Share-Based Payments

6 Months Ended

Apr. 13, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Share-Based Payments

Share-based payment expense before income taxes recognized during the twelve and twenty-eight weeks ended April 13, 2014 totaled approximately $18 million and $36 million, respectively, and approximately $13 million and $30 million, respectively, for the same periods of the prior fiscal year. Share-based payment expense was included in the following line items on the Consolidated Statements of Operations for the periods indicated (in millions):

	Twelve weeks ended						Twenty-eight weeks ended
	April 13, 2014			April 14, 2013			April 13, 2014			April 14, 2013
Cost of goods sold and occupancy costs	$	—		$	—		$	1		$	1
Direct store expenses	8			8			18			17
General and administrative expenses	10			5			17			12
Share-based payment expense before income taxes	18			13			36			30
Income tax benefit	(7		)	(5		)	(14		)	(11		)
Net share-based payment expense	$	11		$	8		$	22		$	19

At April 13, 2014 and September 29, 2013, approximately 41.3 million shares and 42.3 millionshares of the Company’s common stock, respectively, were available for future stock incentive grants.

Stock Options

During the twenty-eight weeks ended April 13, 2014, the Company awarded approximately 0.9 million stock options pursuant to the Whole Foods Market 2009 Stock Incentive Plan. The weighted average grant date fair value per option granted during the twenty-eight weeks ended April 13, 2014 was $14.05. The fair value of stock option grants during fiscal year 2014 has been estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2014
Expected dividend yield	0.897	%
Risk-free interest rate	1.32	%
Expected volatility	32.64	%
Expected life, in years	4.52

Total share-based payment expense related to vesting stock options totaled approximately $16 million and $34 million for the twelve and twenty-eight weeks ended April 13, 2014, respectively, and approximately $12 million and $30 million, respectively, for the same periods of the prior fiscal year. At April 13, 2014 and September 29, 2013, there was approximately $104 million and $130 million of unrecognized share-based payment expense, respectively, related to unvested stock options, net of estimated forfeitures, related to approximately 13.2 million shares and 12.4 million shares, respectively. The Company anticipates this expense to be recognized over a weighted average period of 2.8 years.

Restricted Stock

During the twenty-eight weeks ended April 13, 2014 and April 14, 2013, the Company awarded approximately 0.2 million shares and 0.1 million shares of restricted common stock, respectively, pursuant to the Whole Foods Market 2009 Stock Incentive Plan. Fair value of the restricted share issuances on grant date for the twenty-eight weeks ended April 13, 2014 and April 14, 2013 totaled approximately $11 million and $4 million, respectively.

Total share-based payment expense related to restricted shares for both the twelve and twenty-eight weeks ended April 13, 2014 totaled approximately $2 million and is included in the “General and administrative expenses” line item on the Consolidated Statements of Operations. Share-based payment expense related to restricted shares was not material during fiscal year 2013. At April 13, 2014 and September 29, 2013, there was approximately $12 million and $3 million of unrecognized share-based payment expense, respectively, related to unvested restricted stock. The Company anticipates this expense to be recognized over a weighted average period of 4.4 years.