Sprint - Nextel 2008 Annual Report Download - page 102

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table provides the estimated fair value and assumptions used in determining the fair value
of option awards granted during 2009, 2008 and 2007:
2009 2008 2007
Weighted average grant date fair value ............. $ 3.07 $ 4.59 $ 6.05
Risk free interest rate .......................... 2.05% – 2.86% 2.76% – 3.30% 3.70% – 5.12%
Volatility .................................... 72.0% – 126.2% 69.7% – 98.5% 26.6% – 38.3%
Weighted average expected volatility .............. 113.6% 77.3% 29.0%
Expected dividend yield ........................ 0.00% 0.00% 0.46% – 0.72%
Weighted average expected dividend yield .......... 0.00% 0.00% 0.56%
Expected term (years) .......................... 6.25 – 6.5 6.0 – 6.5 6.0
Options granted (millions) ...................... 28 8 17
A summary of the status of the options under our option plans as of December 31, 2009, and changes
during the year ended December 31, 2009, is presented below:
Shares
Under
Option
Weighted
Average
per
Share
Exercise
Price
Weighted
Average Remaining
Contractual Term
Aggregate
Intrinsic
Value
(in millions) (in years) (in millions)
Outstanding January 1, 2009 ......................... 130 $23.05
Granted ...................................... 28 $ 3.60
Business combination exchange .................. 1 $ 0.78
Exercised .................................... — —
Forfeited/expired .............................. (51) $25.49
Outstanding at December 31, 2009 .................... 108 $16.42 5.25 $7
Vested or expected to vest at December 31, 2009 ......... 102 $17.20 5.01 $6
Exercisable at December 31, 2009 ..................... 73 $21.65 3.53 $0
As of December 31, 2009, there was $69 million of total unrecognized compensation cost related to
unvested options and that cost is expected to be recognized over a weighted-average period of 2.51 years. The
total intrinsic value of options exercised was insignificant during 2009, $9 million during 2008 and $150 million
during 2007.
F-36