Proctor and Gamble 2015 Annual Report Download - page 63

61 The Procter & Gamble Company
Amounts in millions of dollars except per share amounts or as otherwise specified.
grants to employees for which the terms are not substantially
different than key manager awards.
Senior-level executives receive PSU awards. Under this
program, the number of PSUs that will vest three years after
the respective grant date is based on the Company's
performance relative to pre-established performance goals
during that three year period.
Atotal of 185 million shares of common stock were authorized
for issuance under stock-based compensation plan approved
by shareholders in 2014. The number of shares available for
award under the 2014 plan includes the shares previously
authorized but not awarded under the shareholder approved
plans in 2003 and 2009. A total of 156 million shares remain
available for grant under the 2014 plan.
Total stock-based compensation expense for stock option
grants was $223, $246 and $249 for 2015, 2014 and 2013,
respectively. Total compensation expense for restricted stock,
RSUs and PSUs was $114, $114 and $97 in 2015, 2014 and
2013, respectively. The total income tax benefit recognized in
the income statement for stock options, restricted stock, RSUs
and PSUs was $109, $127 and $96 in 2015, 2014 and 2013,
respectively.
In calculating the compensation expense for stock options
granted, we utilize a binomial lattice-based valuation model.
Assumptions utilized in the model, which are evaluated and
revised to reflect market conditions and experience, were as
follows:
Years ended une 0 2015 2014 201
Interest rate 0.1 -2.1 0.1 -2.8 0.2 -2.0
eighted
average interest
rate 2.0 2.5 1.8
Dividend yield .1 3.1 2.9
Expected
volatility 11 -15 15 -17 14 -15
eighted
average
volatility 15 16 15
Expected life in
years . 8.2 8.9
Lattice-based option valuation models incorporate ranges of
assumptions for inputs and those ranges are disclosed in the
preceding table. Expected volatilities are based on a
combination of historical volatility of our stock and implied
volatilities of call options on our stock. e use historical data
to estimate option exercise and employee termination patterns
within the valuation model. The expected life of options
granted is derived from the output of the option valuation model
and represents the average period of time that options granted
are expected to be outstanding. The interest rate for periods
within the contractual life of the options is based on the U.S.
Treasury yield curve in effect at the time of grant.
A summary of options, RSUs and PSUs outstanding under the
plans as of June 30, 2015 and activity during the year then
ended is presented below:
Otions
Otions
in
thousands
Weighted
Ag.
Exercise
Price
Weighted
Ag.
Contract-
ual Life in
Years
Aggregate
Intrinsic
Value
Outstanding,
beginning of
year 291,2  59.4
Granted 2,0 4.9
Exercised 5,294 50.0
Canceled 1,10 0.4
OUTSTANDING,
END OF YEAR 20,292  .4 4.9  ,91
EXERCISABLE 1,959  5. .4  ,95
The weighted average grant-date fair value of options granted
was $9.38, $10.01 and $8.19 per share in 2015, 2014 and 2013,
respectively. The total intrinsic value of options exercised was
$1,814, $1,152 and $1,759 in 2015, 2014 and 2013,
respectively. The total grant-date fair value of options that
vested during 2015, 2014 and 2013 was $241, $319 and $352,
respectively. At June 30, 2015, there was $205 of
compensation cost that has not yet been recognized related to
stock option grants. That cost is expected to be recognized
over a remaining weighted average period of 1.9 years. Cash
received from options exercised was $2,631, $1,938 and
$3,294 in 2015, 2014 and 2013, respectively. The actual tax
benefit realized for the tax deductions from option exercises
totaled $519, $338 and $575 in 2015, 2014 and 2013,
respectively.
RSUs PSUs
Other stock-
ased awards
Units in
thousands
Weighted-
Aerage
Grant-Date
Fair Value
Units in
thousands
Weighted-
Aerage
Grant-Date
Fair Value
Non-vested
at July 1,
2014 4,902 $ 61.74 1,883 $ 66.53
Granted 1,451 9.25 55 .4
ested 1,212 59.22 1,251 .9
Forfeited 1 4.4 19 9.2
Non-ested
at une 0,
2015 5,00  4. 1,1  4.4
At June 30, 2015, there was $197 of compensation cost that
has not yet been recognized related to restricted stock, RSUs
and PSUs. That cost is expected to be recognized over a
remaining weighted average period of 2.9 years. The total fair
value of shares vested was $79, $95 and $51 in 2015, 2014 and
2013, respectively.
e have no specific policy to repurchase common shares to
mitigate the dilutive impact of options, RSUs and PSUs.
However, we have historically made adequate discretionary
purchases, based on cash availability, market trends and other
factors, to offset the impacts of such activity.