HP 2015 Annual Report Download - page 130

Table of Contents



The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have received had all option
holders exercised their options on the last trading day of fiscal 2015, 2014 and 2013. The aggregate intrinsic value is the difference between HP's closing
stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options. The total intrinsic value of
options exercised in fiscal 2015, 2014 and 2013 was $214 million, $151 million and $36 million, respectively. The total grant date fair value of options
vested in fiscal 2015, 2014 and 2013 was $59 million, $53 million and $64 million, respectively, net of taxes.
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(2) For all awards granted in fiscal 2015 and fiscal 2013, expected volatility was estimated using the implied volatility derived from
options traded on HP's common stock. For awards granted in fiscal 2014, expected volatility for awards subject to service-based
vesting was estimated using the implied volatility derived from options traded on HP's common stock, whereas for performance-
contingent awards, expected volatility was estimated using the historical volatility of HP's common stock.
(3) The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.
(4) The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award.
(5) For awards subject to service-based vesting, the expected term was estimated using historical exercise and post-vesting termination
patterns; and for performance-contingent awards, the expected term represents an output from the lattice model.
A summary of stock option activity is as follows:
   
     
   



 




 


  



 




 


  



 




 


 
 

   

 

   

 

   

 
Outstanding at beginning
of year 57,853 $ 27 84,042 $ 27 87,296 $ 29
Granted and assumed
through acquisitions 9,086 $ 36 9,575 $ 28 25,785 $ 15
Exercised (12,845)$ 19 (11,145)$ 18 (10,063)$ 19
Forfeited/cancelled/expired (17,816)$ 40 (24,619)$ 31 (18,976)$ 25
Outstanding at end of year 36,278 $ 26 5.1 $ 153 57,853 $ 27 4.3 $ 629 84,042 $ 27 3.9 $ 303
Vested and expected to
vest at end of year 34,973 $ 26 5.0 $ 152 54,166 $ 27 4.1 $ 571 80,004 $ 27 3.7 $ 274
Exercisable at end of year 25,630 $ 24 4.4 $ 146 30,459 $ 33 2.3 $ 197 49,825 $ 33 1.8 $ 58
Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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