AMD 2011 Annual Report Download - page 115
Download and view the complete annual report
Please find page 115 of the 2011 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105 -
106 -
107 -
108 -
109 -
110 -
111 -
112 -
113 -
114 -
115 -
116 -
117 -
118 -
119 -
120 -
121 -
122 -
123 -
124 -
125 -
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
 |
 |
Valuation and Expense Information
Stock-based compensation expense related to employee stock options, restricted stock and restricted stock
units was allocated in the consolidated statements of operations as follows:
2011 2010 2009
(In millions)
Cost of sales ...................................................... $ 6 $ 4 $ 3
Research and development ........................................... 46 46 40
Marketing, general, and administrative ................................. 38 37 32
Total stock-based compensation expense, net of tax of $0 .................. $90 $87 $75
During 2011, 2010, and 2009, the Company did not realize any excess tax benefits related to stock-based
compensation and therefore the Company did not record any related financing cash flows. The Company did not
capitalize stock-based compensation cost as part of the cost of an asset because the cost was immaterial.
The Company uses the lattice-binomial model in determining the fair value of the employee stock options.
The weighted-average estimated fair value of employee stock options granted for the year ended
December 31, 2011, December 25, 2010 and December 26, 2009 was $2.85, $3.20 and $2.59 per share
respectively, using the following weighted-average assumptions:
2011 2010 2009
Expected volatility ..................................... 54.82% 55.97% 70.51%
Risk-free interest rate ................................... 1.60% 1.34% 1.56%
Expected dividends .................................... 0% 0% 0%
Expected life (in years) ................................. 3.75 3.71 3.67
The Company used a combination of the historical volatility of its common stock and the implied volatility
for publicly traded options on the Company’s common stock as the expected volatility assumption required by
the lattice-binomial model. The risk-free interest rate assumption is based upon observed interest rates
commensurate with the term of the Company’s employee stock options. The expected dividend yield is zero as
the Company does not expect to pay dividends in the future. The expected term of employee stock options
represents the weighted-average period the stock options are expected to remain outstanding and is a derived
output of the lattice-binomial model.
The following table summarizes stock option activity, including market-based stock options, and related
information:
2011 2010 2009
Number
of Shares
Weighted-
Average
Exercise
Price
Number
of Shares
Weighted-
Average
Exercise
Price
Number
of Shares
Weighted-
Average
Exercise
Price
(In millions, except share price)
Options:
Outstanding at beginning of year ....... 37 $ 7.77 42 $ 8.65 58 $11.97
Granted ........................... 8 $ 7.16 5 $ 7.77 10 $ 4.24
Cancelled ......................... (6) $12.54 (6) $16.92 (25) $14.20
Exercised ......................... (5) $ 3.82 (4) $ 3.35 (1) $ 3.09
Outstanding at end of year ................ 34 $ 7.36 37 $ 7.77 42 $ 8.65
Exercisable at end of year ................ 25 $ 7.48 28 $ 8.24 24 $12.04
109