Intel 2007 Annual Report Download - page 74

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We computed our basic earnings per common share using net income and the weighted average number of common shares
outstanding during the period. We computed diluted earnings per common share using net income and the weighted average
number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially
dilutive common shares include the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted
stock units, assumed issuance of stock under the stock purchase plan using the treasury stock method, and the assumed
conversion of debt using the if-converted method.
For 2007, we excluded 417 million outstanding weighted average stock options (693 million in 2006 and 372 million in
2005) from the calculation of diluted earnings per common share because the exercise prices of these stock options were
greater than or equal to the average market value of the common shares. These options could be included in the calculation in
the future if the average market value of the common shares increases and is greater than the exercise price of these options.
Note 5: Common Stock Repurchases
Common Stock Repurchase Program
We have an ongoing authorization, amended in November 2005, from our Board of Directors to repurchase up to $25 billion
in shares of our common stock in open market or negotiated transactions. During 2007, we repurchased 111 million shares of
common stock at a cost of $2.75 billion (226 million shares at a cost of $4.6 billion during 2006 and 418 million shares at a
cost of $10.6 billion during 2005). We have repurchased and retired 2.9 billion shares at a cost of approximately $60 billion
since the program began in 1990. As of December 29, 2007, $14.5 billion remained available for repurchase under the existing
repurchase authorization.
Restricted Stock Unit Withholdings
We issue restricted stock units as part of our equity incentive plans, which are described more fully in “Note 3: Employee
Equity Incentive Plans.” For the majority of restricted stock units granted, the number of shares issued on the date the
restricted stock units vest is net of the statutory withholding requirements that we pay on behalf of our employees. During
2007, we withheld 1.7 million shares to satisfy $38 million of employees’ tax obligations. We paid this amount in cash to the
appropriate taxing authorities. Although shares withheld are not issued, they are treated as common stock repurchases for
accounting and disclosure purposes, as they reduce the number of shares that would have been issued upon vesting.
Note 6: Borrowings
Short
-Term Debt
Short-term debt included non-interest-bearing drafts payable of $140 million and the current portion of long-term debt of
$2 million as of December 29, 2007 (drafts payable of $178 million and the current portion of long-term debt of $2 million as
of December 30, 2006). We also have the ability to borrow under our commercial paper program, which has a pre-authorized
limit of up to $3.0 billion. There were no borrowings under our commercial paper program during 2007 and 2006. Our
commercial paper was rated A-1+ by Standard & Poor’s and P-1 by Moody’s as of December 29, 2007.
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