Intel 2007 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2007 Intel 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.

Page out of 144

  • 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

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We base the expected volatility on implied volatility, because we have determined that implied volatility is more reflective of
market conditions and a better indicator of expected volatility than historical volatility. We use the simplified method of
calculating expected life described in SAB 107, due to significant differences in the vesting terms and contractual life of
current option grants compared to our historical grants.
We estimate the fair value of restricted stock unit awards using the value of our common stock on the date of grant, reduced by
the present value of dividends expected to be paid on our common stock prior to vesting. We based the weighted average
estimated values of restricted stock unit grants, as well as the weighted average assumptions that we used in calculating the
fair value, on estimates at the date of grant, as follows:
Stock Option Awards
Options outstanding that have vested and are expected to vest as of December 29, 2007 are as follows:
Options with a fair value of $1.4 billion completed vesting during 2007. As of December 29, 2007, there was $524 million in
unrecognized compensation costs related to stock options granted under our equity incentive plans. We expect to recognize
those costs over a weighted average period of 1.1 years.
62
2007
2006
Estimated values
$
21.13
$
18.70
Risk
-
free interest rate
4.7
%
4.9
%
Dividend yield
2.0
%
2.0
%
Weighted
Average
Weighted
Remaining
Aggregate
Number of
Average
Contractual
Intrinsic
Shares
Exercise
Term
Value
1
(In Millions)
Price
(In Years)
(In Millions)
Vested
528.2
$
29.04
3.8
$
1,536
Expected to vest
2
118.5
$
22.89
5.4
493
Total
646.7
$
27.91
4.1
$
2,029
1
Amounts represent the difference between the exercise price and $26.76, the closing price of Intel stock on
December 28, 2007, as reported on The NASDAQ Global Select Market*, for all in
-
the
-
money options outstanding.
2
Options outstanding that are expected to vest are net of estimated future option forfeitures in accordance with the
provisions of SFAS No. 123(R).