Intel 2007 Annual Report Download - page 69

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an
amendment of ARB No. 51” (SFAS No. 160). SFAS No. 160 changes the accounting and reporting for minority interests,
which will be recharacterized as non-controlling interests and classified as a component of equity. SFAS No. 160 is effective
for us on a prospective basis for business combinations with an acquisition date beginning in the first quarter of fiscal year
2009. As of December 29, 2007, we did not have any minority interests. The adoption of SFAS No. 160 will not impact our
consolidated financial statements.
In December 2007, the U.S. Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin 110 (SAB 110) to
amend the SEC’s views discussed in Staff Accounting Bulletin 107 (SAB 107) regarding the use of the simplified method in
developing an estimate of expected life of share options in accordance with SFAS No. 123(R). SAB 110 is effective for us
beginning in the first quarter of fiscal year 2008. We will continue to use the simplified method until we have the historical
data necessary to provide a reasonable estimate of expected life in accordance with SAB 107, as amended by SAB 110.
Accounting Changes
In fiscal year 2007, we adopted EITF Issue No. 06-2, “Accounting for Sabbatical Leave and Other Similar Benefits Pursuant
to FASB Statement No. 43” (EITF 06-2). EITF 06-2 requires companies to accrue the cost of these compensated absences
over the service period. We adopted EITF 06-2 through a cumulative-effect adjustment, resulting in an additional liability of
$280 million, additional deferred tax assets of $99 million, and a reduction to retained earnings of $181 million at the
beginning of 2007.
We also adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB
Statement No. 109” (FIN 48), and related guidance in fiscal year 2007. See “Note 17: Taxes” for further discussion.
Note 3: Employee Equity Incentive Plans
Our equity incentive plans are broad-based, long-
term retention programs intended to attract and retain talented employees and
align stockholder and employee interests.
In May 2007, stockholders approved an extension of the 2006 Equity Incentive Plan (the 2006 Plan). Stockholders approved
119 million additional shares for issuance, increasing the total shares of common stock available for issuance as equity awards
to employees and non-employee directors to 294 million shares. Of this amount, we increased the maximum number of shares
to be awarded as non-vested shares (restricted stock) or non-vested share units (restricted stock units) to 168 million shares.
The approval also extended the expiration date of the 2006 Plan to June 2010. The 2006 Plan allows for time-based,
performance-based, and market-based vesting for equity incentive awards. As of December 29, 2007, we had not issued any
performance-based or market-
based equity incentive awards. As of December 29, 2007, 226 million shares remained available
for future grant under the 2006 Plan. We may assume the equity incentive plans and the outstanding equity awards of certain
acquired companies. Once they are assumed, we do not grant additional shares under these plans.
We began issuing restricted stock units in 2006. We issue shares on the date that the restricted stock units vest. The majority of
shares issued are net of the statutory withholding requirements that we pay on behalf of our employees. As a result, the actual
number of shares issued will be less than the number of restricted stock units granted. Prior to vesting, restricted stock units do
not have dividend equivalent rights, do not have voting rights, and the shares underlying the restricted stock units are not
considered issued and outstanding.
Equity awards granted to employees in 2007 under our equity incentive plans generally vest over 4 years from the date of
grant, and options expire 7 years from the date of grant. Equity awards granted to key officers, senior-level employees, and
key employees in 2007 may have delayed vesting beginning 2 to 5 years from the date of grant, and options expire 7 to
10 years from the date of grant.
The 2006 Stock Purchase Plan allows eligible employees to purchase shares of our common stock at 85% of the value of our
common stock on specific dates. Under the 2006 Stock Purchase Plan, we made 240 million shares of common stock available
for issuance through August 2011. As of December 29, 2007, 214 million shares were available for issuance under the 2006
Stock Purchase Plan.
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