Exercise of stock options provides a source of operating cash flow because of the accounting treatment of reduced income tax payments. Tax savings from option exercises can generate a high percentage of a company's total operating cash flow, although this source of cash varies substantially among companies and from year to year. The net effect of option exercises on cash is a function of tax savings, exercise volume and depth, and funding policy. From 1999 through 2001, companies in the S&P 100 Index repurchased stock well in excess of option exercises whereas Nasdaq 100 Index companies tended to meet exercise demand with previously unissued shares. On average, Nasdaq 100 companies would have had to spend 39 cents of every dollar of revenue over the 1999–2001 time frame to fully fund option exercises and avoid increasing the number of shares outstanding. Cash flow effects of option exercises will remain an issue regardless of the expense treatment of stock option grants.