Computer Associates 2016 Annual Report Download - page 96

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Additional information with respect to stock option activity was as follows:
Number of
Shares
(in millions)
Weighted
Average
Exercise
Price
Outstanding at March 31, 2013 6.0 $ 25.17
Granted 1.7 27.86
Exercised (3.5) 25.06
Expired or terminated (0.5) 25.95
Outstanding at March 31, 2014 3.7 $ 26.13
Granted 0.9 29.13
Exercised (0.9) 25.46
Expired or terminated (0.5) 26.81
Outstanding at March 31, 2015 3.2 $ 27.02
Granted 0.8 30.39
Exercised (0.2) 25.58
Expired or terminated (0.1) 31.08
Outstanding at March 31, 2016 3.7 $ 27.72
Number
of Shares
(in millions)
Weighted
Average
Exercise
Price
Options exercisable at:
March 31, 2014 0.7 $ 26.07
March 31, 2015 1.2 $ 25.92
March 31, 2016 2.0 $ 26.16
The following table summarizes stock option information at March 31, 2016:
Options Outstanding Options Exercisable
Range of Exercise Prices
Shares
(in millions)
Aggregate
Intrinsic
Value
(in millions)
Weighted
Average
Remaining
Contractual
Life
(in years)
Weighted
Average
Exercise
Price
Shares
(in millions)
Aggregate
Intrinsic
Value
(in millions)
Weighted
Average
Remaining
Contractual
Life
(in years)
Weighted
Average
Exercise
Price
$21.78 — $25.00 0.8 $ 6.0 6.1 $ 23.53 0.8 $ 6.0 6.1 $ 23.53
$25.01 — $30.00 1.4 4.8 7.1 27.43 0.8 3.2 6.5 26.96
$30.01 — over 1.5 0.7 8.6 30.37 0.4 0.2 7.6 30.23
3.7 $ 11.5 7.4 $ 27.72 2.0 $ 9.4 6.5 $ 26.16
The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. The Company
believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in
calculating the fair value of the Company’s stock options. Estimates of fair value are not intended to predict actual future events
or the value ultimately realized by employees who receive equity awards.
The weighted average estimated values of employee stock option grants, as well as the weighted average assumptions that were
used in calculating such values during fiscal years 2016, 2015 and 2014 were based on estimates at the date of grant as follows:
Year Ended March 31,
2016 2015 2014
Weighted average fair value $ 4.68 $ 5.61 $ 5.20
Dividend yield 3.37% 3.32% 4.05%
Expected volatility factor(1) 23% 27% 30%
Risk-free interest rate(2) 1.9% 2.0% 1.5%
Expected life (in years)(3) 6.0 6.0 6.0
(1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the
market prices of the Company’s traded options.
(2) The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.
(3) The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Company’s computation of expected life was determined based on
the simplified method (the average of the vesting period and option term).
The following table summarizes information on options exercised for the periods indicated:
Year Ended March 31,
(in millions) 2016 2015 2014
Cash received from options exercised $ 4 $ 22 $ 88
Intrinsic value of options exercised $ 1 $ 3 $ 19
86