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$ in millions, except per share amounts or as otherwise noted
beginning after November 15, 2008. We will adopt SFAS
Stock-Based Compensation
No. 161 beginning in the fourth quarter of fiscal 2009.
At the beginning of fiscal 2006, we early-adopted the fair We are evaluating the impact the adoption of SFAS
value recognition provisions of SFAS No. 123 (revised No. 161 will have on our consolidated financial
2004), Share-Based Payment (123(R)), requiring us to statements.
recognize expense related to the fair value of our stock-
In December 2007, the FASB issued SFAS No. 141(revised
based compensation awards. We elected the modified
2007), Business Combinations (‘‘141R’’). SFAS No. 141R
prospective transition method as permitted by SFAS
significantly changes the accounting for business
No. 123(R). Under this transition method, stock-based
combinations in a number of areas including the treatment
compensation expense in fiscal 2008, 2007 and 2006
of contingent consideration, preacquisition contingencies,
included: (i) compensation expense for all stock-based
transaction costs, in-process research and development
compensation awards granted prior to, but not yet vested
and restructuring costs. In addition, under SFAS No. 141R,
as of February 26, 2005, based on the grant date fair
changes in an acquired entity’s deferred tax assets and
value estimated in accordance with the original provisions
uncertain tax positions after the measurement period will
of SFAS No. 123, Accounting for Stock-Based
impact income tax expense. SFAS No. 141R is effective for
Compensation; and (ii) compensation expense for all
fiscal years beginning after December 15, 2008. We will
stock-based compensation awards granted subsequent to
adopt SFAS No. 141R beginning in the first quarter of
February 26, 2005, based on the grant-date fair value
fiscal 2010. This standard will change our accounting
estimated in accordance with the provisions of SFAS
treatment for business combinations on a prospective
No. 123(R). We recognize compensation expense on a
basis.
straight-line basis over the requisite service period of the
award (or to an employee’s eligible retirement date, if In December 2007, the FASB issued SFAS No. 160,
earlier). Total stock-based compensation expense included Noncontrolling Interests in Consolidated Financial
in our consolidated statements of earnings for fiscal 2008, Statements, an amendment of ARB No. 51. SFAS No. 160
2007 and 2006 was $105 ($72, net of tax), $121 ($82, changes the accounting and reporting for minority
net of tax) and $132 ($87, net of tax), respectively. In interests, which will be recharacterized as noncontrolling
accordance with the modified prospective transition interests and classified as a component of equity. This new
method of SFAS No. 123(R), financial results for prior consolidation method significantly changes the accounting
periods have not been restated. for transactions with minority interest holders. SFAS
No. 160 is effective for fiscal years beginning after
New Accounting Standards December 15, 2008. We will adopt SFAS No. 160
beginning in the first quarter of fiscal 2010. We are
In March 2008, the FASB issued SFAS No. 161,
evaluating the impact the adoption of SFAS No. 160 will
Disclosures about Derivative Instruments and Hedging
have on our consolidated financial position or results of
Activities, an amendment of SFAS No. 133. SFAS No. 161
operations.
is intended to improve financial standards for derivative
instruments and hedging activities by requiring enhanced In February 2007, the FASB issued SFAS No. 159, The
disclosures to enable investors to better understand their Fair Value Option for Financial Assets and Financial
effects on an entity’s financial position, financial Liabilities. SFAS No. 159 permits companies to choose to
performance and cash flows. Entities are required to measure many financial instruments and certain other
provide enhanced disclosures about: how and why an items at fair value. The objective is to improve financial
entity uses derivative instruments; how derivative reporting by providing companies with the opportunity to
instruments and related hedged items are accounted for mitigate volatility in reported earnings caused by
under SFAS No. 133 and its related interpretations; and measuring related assets and liabilities differently without
how derivative instruments and related hedged items affect having to apply complex hedge accounting provisions.
an entity’s financial position, financial performance and SFAS No. 159 is effective for fiscal years beginning after
cash flows. SFAS No. 161 is effective for financial November 15, 2007. Companies are not allowed to
statements issued for fiscal years and interim periods adopt SFAS No. 159 on a retrospective basis unless they
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