Comcast 2012 Annual Report Download - page 109

Table of Contents
Note 14: Share-Based Compensation
The tables below provide condensed information on our share-based compensation.
Recognized Share-Based Compensation Expense
As of December 31, 2012, we had unrecognized pretax compensation expense of $320 million related to nonvested stock options
and unrecognized pretax compensation expense of $353 million related to nonvested RSUs that will be recognized over a weighted-
average period of approximately 1.9 years and 1.7 years, respectively.
2012 Stock Options and Restricted Share Units
Our share-
based compensation primarily consists of awards of stock options and RSUs to certain employees and directors as part of
our approach to long-
term incentive compensation. Awards generally vest over a period of five years and in the case of stock
options, have a ten year term. Additionally, through our employee stock purchase plans, employees are able to purchase shares of
Comcast Class A common stock at a discount through payroll deductions.
The cost associated with our share-based compensation is based on an award’
s estimated fair value at the date of grant and is
recognized over the period in which any related services are provided. We use the Black-
Scholes option pricing model to estimate
the fair value of stock option awards. RSUs are valued based on the closing price of our Class A common stock on the date of grant
and are discounted for the lack of dividends, if any, during the vesting period. The table below presents the weighted-
average fair
value on the date of grant of RSUs and Class A common stock options awarded under our various plans and the related weighted-
average valuation assumptions.
Year ended December 31 (in millions)
2012
2011
2010
Stock options
$
131
$
116
$
103
Restricted share units
154
149
136
Employee stock purchase plans
16
13
12
Total
$
301
$
278
$
251
As of December 31, 2012, unless otherwise stated (in millions, except per share data)
Stock
Options
RSUs
Awards granted during 2012
22
8
Weighted-average exercise price
$
30.00
Weighted-average fair value at grant date
$
27.80
Stock options outstanding and nonvested RSUs
113
29
Weighted
-
average exercise price of stock options outstanding
$
21.86
Weighted
-
average fair value at grant date of nonvested RSUs
$
20.90
(a)
As of December 31, 2012, 109 million of stock options outstanding were net settled stock options. Net settled stock options, as opposed to stock options exercised with a
cash payment (“cash settled stock options”), result in fewer shares being issued and no cash proceeds being received by us when they are exercised.
2012
2011
2010
RSUs fair value
$
27.80
$
22.78
$
16.94
Stock options fair value
$
7.38
$
6.96
$
5.11
Stock Option Valuation Assumptions:
Dividend yield
2.2
%
1.8
%
2.1
%
Expected volatility
29.0
%
28.1
%
28.0
%
Risk-free interest rate
1.7
%
2.8
%
3.4
%
Expected option life (in years)
7.0
7.0
7.0
Comcast 2012 Annual Report on Form 10
-
K
106
(a)