Albertsons 2007 Annual Report Download - page 104

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SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F
ebruar
y
26, 2005 was $71, $29 and $41, respectivel
y
. Intrinsic value is measured usin
g
the fair market value at
the date of exercise for stock options exercised or at February 24, 2007 for outstanding stock options, less the
a
pp
li
ca
bl
e exerc
i
se pr
i
ce
.
F
or stock options, the fair value of each option
g
rant is estimated as of the date of
g
rant usin
g
the Black-Scholes
o
ption pricing model. Expected volatilities are estimated based on an average of actual historical volatility and
i
mp
li
e
d
vo
l
at
ili
t
i
es correspon
di
ng to t
h
e opt
i
ons est
i
mate
d
expecte
d
term. T
h
e Company
b
e
li
eves t
hi
s approac
h
to determine volatilities is re
p
resentative of future stock volatilities. The ex
p
ected term of o
p
tions are estimated
b
ased on analysis of options already exercised and foreseeable trends or changes in behavior. The risk fre
e
i
nterest rates are
b
ase
d
on t
h
e U.S. Treasury secur
i
t
i
es matur
i
t
i
es as o
f
eac
h
app
li
ca
bl
e grant
d
ate. T
h
e
di
v
id
en
d
y
ield is based on anal
y
sis of actual historical dividend
y
ields
.
T
he significant weighted average assumptions relating to the valuation of the Company’s stock options for th
e
52-week periods ended February 24, 2007 and February 25, 2006 were as follows:
52 Weeks Ende
d
Februar
y
24,
2
00
7
F
ebruar
y
25
,
2
006
Februar
y
26
,
2
005
Di
v
id
en
d
y
i
e
ld
2.0% 2.0% 2.0%
V
olatility rate 20.6 - 29.
5
% 28.9% 31.8%
R
isk-free interest rate 4.
5
-
5
.2% 3.9% 3.1%
Expected option life (
y
ears) 1.0 -
5
.4
y
ears 4.8
y
ears 4.
5y
ears
Com
p
ensation Ex
p
ens
e
T
he components of pre-tax stock-based compensation expense (included primaril
y
in Sellin
g
and administrativ
e
expenses in the Consolidated Statement of Earnings) and related tax benefits were as follows
:
52
Weeks Ended
February 24,
2007
F
ebruary 25
,
2006
February 26,
200
5
S
tock-based com
p
ensation
$
43
$
3
$
1
2
Income tax benefits (17) (1) (4)
S
tock-based compensation (net of tax) $ 26 $ 2 $ 8
T
he Company realized excess tax benefits of
$
22 related to the exercise of stock options
.
Unrecognized Compensation Expens
e
S
toc
k
O
p
tions
As of Februar
y
24, 2007, there was $27 of unreco
g
nized compensation expense related to nonvested option
s
g
ranted under the Company’s stock-based compensation plans. The expense related to these nonvested awards i
s
expecte
d
to
b
ec
h
arge
d
to expense over a we
i
g
h
te
d
-average rema
i
n
i
ng vest
i
ng per
i
o
d
o
f
approx
i
mate
l
y two years.
Option shares available for
g
rant were 17 and 10 at Februar
y
24, 2007 and Februar
y
2
5
, 2006, respectivel
y
.Asof
February 24, 2007, the Company has reserved 40 shares, in aggregate, for the plans.
F-
38