Intel reports the following information on its stock options incentive programs in its December 31, 2001 financial statement footnotes
The company's stock option plans are accounted for under the intrinsic value recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. As the exercise price of all options granted under these plans was equal to the market price of the underlying common stock on the grant date, no stock-based employee compensation cost, other than acquisition-related compensation, is recognized in net income. The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to employee stock benefits, including shares issued under the stock option plans and under the company's Stock Participation Plan, collectively called "options."

Record Intel adjustments to the financial statements required to show an expense for stock options under the fair value method for 2001 and 2002.
Intel reports that its marginal tax rate is35%.

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(In Millions) Net income, as reported Less: Total stock-based employee compensation 170 expense determined under the fair value method for all awards, net of 2002 2001 2000 S 3,117 1,29 S 10,535 1,037 836 tax Pro-forma net income S1,947 S254 S9.699