HP 2009 Annual Report Download - page 106
Download and view the complete annual report
Please find page 106 of the 2009 HP 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
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
 |
 |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2: Stock-Based Compensation (Continued)
The weighted-average fair value of stock options was estimated using the Black-Scholes option
pricing model with the following weighted-average assumptions:
Stock Options(1)
2009 2008 2007
Weighted-average fair value of grants per share ..................... $13.04 $15.26 $13.01
Implied volatility ............................................ 43% 34% 28%
Risk-free interest rate ........................................ 2.07% 3.09% 4.68%
Dividend yield ............................................. 0.92% 0.69% 0.75%
Expected life in months ....................................... 61 60 59
(1) The fair value calculation was based on stock options granted during the period.
Option activity as of October 31 during each fiscal year was as follows:
2009 2008
Weighted- Weighted- Weighted- Weighted-
Average Average Average Average
Exercise Remaining Aggregate Exercise Remaining Aggregate
Price Contractual Intrinsic Price Contractual Intrinsic
Shares Per Share Term Value Shares Per Share Term Value
In thousands In years In millions In thousands In years In millions
Outstanding at beginning of year . . 307,728 $34 367,339 $33
Granted and assumed through
acquisitions ............. 2,190 $29 10,849 $49
Exercised ................ (55,784) $28 (54,949) $26
Forfeited/cancelled/expired ...... (20,920) $57 (15,511) $45
Outstanding at end of year ..... 233,214 $33 2.6 $3,643 307,728 $34 3.4 $2,752
Vested and expected to vest at end
of year ................ 231,134 $33 2.6 $3,623 304,198 $34 3.3 $2,731
Exercisable at end of year ...... 207,757 $32 2.2 $3,399 252,049 $34 2.8 $2,423
In fiscal 2008, approximately 8 million stock options with a weighted-average exercise price of $50
per share were assumed through the acquisition of EDS.
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that
option holders would have received had all option holders exercised their options on October 31, 2009
and 2008. The aggregate intrinsic value is the difference between HP’s closing stock price on the last
trading day of fiscal 2009 and fiscal 2008 and the exercise price, multiplied by the number of
in-the-money options. Total intrinsic value of options exercised in fiscal 2009, 2008 and 2007 was
$0.8 billion, $1.1 billion and $2.0 billion, respectively. Total fair value of options vested and expensed in
fiscal 2009, 2008 and 2007 was $172 million, $264 million and $297 million, respectively, net of taxes.
99