To: TimbaBear who wrote (15034 ) 8/2/2002 7:58:26 PM From: TimbaBear Read Replies (3) | Respond to Stock Options Accounting and Insider Profit Grabbing (page 2)"At February 1, 2002, the Company had $8.3 billion of total cash and investments (including investments in equity securities discussed below), all of which is stated at fair value . The Company’s investment policy is to manage its total cash and investments balances to preserve principal and liquidity while maximizing the return on the investment portfolio through the full investment of available funds. "The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America, which require the use of management’s estimates. The Company believes its most critical accounting policies relate to revenue recognition and warranty accruals....." There were 290 million, 254 million, and 264 million options to purchase the Company’s common stock available for future grants under the Option Plans at February 1, 2002, February 2, 2001, and January 28, 2000, respectively. Fair Value Disclosures — The weighted average fair value of stock options at date of grant was $13.04, $20.98, and $22.64, per option for options granted during fiscal 2002, 2001, and 2000, respectively . Additionally, the weighted average fair value of the purchase rights under the employee stock purchase plan granted in fiscal 2002, 2001, and 2000 was $6.74, $13.95, and $11.12 per right, respectively. The weighted average fair value of options and purchase rights under the employee stock purchase plan was determined based on the Black-Scholes model…… What a crock! Why not use the actual cost to replace of $44.12/share (3 billion divided by 68 million) if not for the intent to hide the real cost? the real doozy :Had the Company accounted for its Option Plans and employee stock purchase plan by recording compensation expense based on the fair value at the grant date on a straight-line basis over the vesting period, stock-based compensation costs would have reduced pretax income by $964 million ($694 million, net of taxes), $620 million ($434 million, net of taxes), and $329 million ($224 million, net of taxes) in fiscal 2002, 2001, and 2000, respectively. The pro forma effect on basic earnings per common share would have been a reduction of $0.27, $0.17, and $0.09 for fiscal 2002, 2001, and 2000, respectively. The pro forma effect on diluted earnings per common share would have been a reduction of $0.27, $0.16, and $0.08 for fiscal 2002, 2001, and 2000, respectively.
