Best Buy 2002 Annual Report Download - page 48

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46 Notes to Consolidated Financial Statements
As permitted by SFAS No.123, we elected to account for our stock option plans under the provisions of APB Opinion
No. 25. Accordingly, no compensation cost has generally been recognized for stock options granted. Had we adopted
SFAS No.123, the pro forma effects on net earnings, basic earnings per share and diluted earnings per share for the
last three fiscal years would have been as follows:
2002 2001 2000
Net earnings
As reported $ 570 $ 396 $ 347
Pro forma 512 352 322
Basic earnings per share
As reported $1.80 $1.28 $1.13
Pro forma 1.62 1.14 1.05
Diluted earnings per share
As reported $1.
77
$1.24 $1.09
Pro forma 1.61 1.11 1.01
The fair value of each option was estimated on the date of the grant using the Black-Scholes option pricing model with
the following assumptions:
2002 2001 2000
Risk-free interest rate 4.9% 6.1% 6.4%
Expected dividend yield 0% 0% 0%
Expected stock price volatility 55% 60% 50%
Expected life of options 4.5 years 4.5 years 4.5 years
The weighted average fair value of options granted during fiscal 2002, 2001 and 2000 used in computing pro forma
compensation expense was $18.60, $23.06 and $17.06 per share, respectively.
$ in millions, except per share amounts