Kodak 2001 Annual Report Download - page 75

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73
Further information relating to options is as follows:
Weighted
Shares Average
(Amounts in thousands, Under Range of Price Exercise Price
except per share amounts) Option Per Share Per Share
Outstanding on
December 31, 1998 34,331 $30.25–$92.31 $61.04
Granted 4,276 $60.13–$79.63 $65.17
Exercised 1,101 $30.25–$74.31 $39.73
Terminated, Canceled
or Surrendered 473 $31.45–$92.31 $63.80
Outstanding on
December 31, 1999 37,033 $30.25–$92.31 $62.12
Granted 12,533 $37.25–$69.53 $54.38
Exercised 1,326 $30.25–$58.63 $32.64
Terminated, Canceled
or Surrendered 3,394 $31.45–$90.50 $62.22
Outstanding on
December 31, 2000 44,846 $32.50–$92.31 $60.87
Granted 8,575 $26.90–$74.31 $36.49
Exercised 615 $32.50–$43.18 $35.91
Terminated, Canceled
or Surrendered 2,351 $32.50–$90.75 $50.33
Outstanding on
December 31, 2001 50,455 $25.92–$92.31 $57.53
Exercisable on
December 31, 1999 19,913 $30.25–$92.31 $57.08
Exercisable on
December 31, 2000 28,783 $32.50–$92.31 $62.13
Exercisable on
December 31, 2001 31,571 $26.90–$92.31 $63.54
The table above excludes approximately 68,000 options granted by the
Company at an exercise price of $.05–$21.91 as part of an acquisition.
As allowed by SFAS No. 123, “Accounting for Stock-Based
Compensation,” the Company has elected to continue to follow APB
Opinion No. 25, “Accounting for Stock Issued to Employees,” in
accounting for its stock option plans. Under APB No. 25, the Company
does not recognize compensation expense upon the issuance of its stock
options because the option terms are fixed and the exercise price equals
the market price of the underlying stock on the grant date. The Company
has determined the pro forma information as if the Company had
accounted for stock options granted under the fair value method of SFAS
No. 123. The Black-Scholes option pricing model was used with the
following weighted-average assumptions for options issued in each year:
2001 2000 1999
Risk-free interest rates 4.2% 6.2% 5.1%
Expected option lives 6 years 7 years 7 years
Expected volatilities 34% 29% 28%
Expected dividend yields 4.43% 3.19% 2.76%
The weighted-average fair value of options granted was $8.37, $16.79
and $18.77 for 2001, 2000 and 1999, respectively.
For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options’ vesting period
(2–3 years). The Company’s pro forma information follows:
Year Ended December 31
(in millions,
except per share data) 2001 2000 1999
Net earnings
As reported $76 $1,407 $1,392
Pro forma (3) 1,346 1,263
Basic earnings per share
As reported $.26 $4.62 $ 4.38
Pro forma (.01) 4.41 3.97
Diluted earnings per share
As reported $.26 $4.59 $ 4.33
Pro forma (.01) 4.41 3.96