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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: The Duke of URL© who wrote (173373)	3/7/2003 12:03:16 PM
From: hueyone	Respond to of 186894

Hi Duke: How did you determine the "cost" of the option grant to the company? I assume you used fully dilluted shares outstanding as the denominator for all eps? I should have been more specific. The figures I posted are the pro forma earnings that companies are required to post in the footnotes of their 10Ks once a year. GAAP earnings are adjusted to take in to account stock option expense using a Black Scholes or other binomial model to figure the value of the stock options at date of grant. This Black Scholes (or binomial model) value is then subsequently amortized over the vesting period of the options to arrive at this once yearly pro forma figure earnings figure adjusted for stock option expense. These figures are included in the footnotes of the 10Ks because FASB rule 123 requires companies to do this. Scroll down these footnotes in this link to Intel's most recent 10K, dated 12/31/2001, and you will find the pro forma earnings adjusted for SFAS 123 stock option expense: edgarscan.pwcglobal.com Thank you for the work, would you add 2002 to your earnings chart, please??? The recent trend may be somewhat informative. I agree completely, but unfortunately, it has been nearly all companies' policies to only meet the minimum requirement by FASB to include the expenses in the footnotes of the 10K once a year. Most companies are quite happy burying these expenses in the footnotes of the 10Ks once a year where very few people ever find them or read them. Hence, I do not have the 2002 figures yet for Intel, because the 2002 Intel 10K is not out yet. By the way, CISCO, as part of their attempt to ward off mandatory expensing of stock options on the income statement, has recently decided to start posting pro forma earnings adjusted for Black Scholes stock options expense at date of grant--- on a quarterly basis in their 10Qs rather than just once a year in the 10Ks. I think I read somewhere that Intel may start doing this as well, but I could not find the pro forma expenses in Intel's 9/30/02 10Q. Standard and Poors, which includes stock option expense in their Core Earnings reports, is pushing hard for companies to include this information in their quarterly reports, so S&P can provide Core Earnings on a quarterly basis instead of just an annual basis after the 10Ks come out. Regards, Huey

To: The Duke of URL© who wrote (173373)	3/7/2003 12:39:59 PM
From: hueyone	Respond to of 186894

I assume you used fully dilluted shares outstanding as the denominator for all eps? Yes, I did. Regards, Huey

To: The Duke of URL© who wrote (173373)	3/13/2003 1:18:24 AM
From: hueyone	Read Replies (2) \| Respond to of 186894

Would you add 2002 to your earnings chart, please??? Ok, the 2002 info is available now. This chart gives Intel's diluted GAAP earnings and Intel's pro-forma diluted GAAP earnings adjusted to take in to account stock option expense. The stock option expense is calculated at date of grant and amortized over the vesting period using Black Scholes or other binomial option pricing model. Fiscal Year GAAP EPS GAAP EPS w/ SFAS Op Exp 12/31/99 $1.05 $0.99 12/31/00 $1.51 $1.40 12/31/01 $0.19 $0.04 12/31/02 $0.46 $0.29 Regards, Huey