Qantas 2008 Annual Report Download - page 117

Download and view the complete annual report

Please find page 117 of the 2008 Qantas annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

115 Qantas Annual Report 2008
Notes to the Financial Statements
for the year ended 30 June 2008
The DSP Terms & Conditions were approved by shareholders at the 2002 AGM. The DSP governs the provision of equity benefi ts to Executives within
the Qantas Group. There have been no modifi cations to the DSP Terms & Conditions during the year.
The total share-based payment expense is detailed in Note 4.
Performance Rights Plan
The PRP is specifi cally targeted to Senior Executives in key roles or other participants who have been identifi ed as high potential Executives.
All Rights are redeemable on a one-for-one basis for Qantas shares, subject to the achievement of the performance hurdle. Dividends are not payable
on the Rights.
Performance rights reconciliation
2008 2007
Number
of Rights
Number
of Rights
Rights outstanding as at 1 July 5,038,800 4,590,000
Rights granted 2,545,000 2,044,300
Rights lapsed (288,276) (279,000)
Rights vested (1,174,491) (1,316,500)
Rights outstanding as at 30 June 6,121,033 5,038,800
Rights exercisable as at 30 June 1,041,633 675,748
No Rights expired during the year.
All Rights were granted with a nil exercise price. No amount has been paid, or is payable by, the Executive in relation to these Rights. During the year,
1,174,491 Rights were exercised (2007: 1,316,500). Subject to confi rmation of the achievement of the performance hurdle tested as at 30 June 2008,
for the 2005/06 award, 939,600 Rights may vest after 12 August 2008. A further 307,700 Rights may vest from the 2004/05 award over the next
year, subject to achievement of the performance hurdle. At 30 June 2008, 102,033 Rights are available to be exercised at the request of the Executive
under the 2004/05 award. For more information on the operation of the PRP, see page 65.
Fair value calculation
The estimated value of Rights granted in 2007/08 were valued at grant date using a Monte-Carlo Valuation Methodology for the TSR performance
hurdle component. A Black Scholes model was used to value the Rights with the EPS performance hurdle. In 2006/07, the estimated value of Rights
was calculated at grant date using a Monte-Carlo Valuation Methodology.
The weighted average fair value of Rights granted during the year was $3.34 (2007: $2.92).
Inputs into the models 2008 2007
Weighted average share value $4.58 $3.90
Expected volatility 25.0 – 30.0% 24.0%
Dividend yield 6.2% 6.0%
Risk-free interest rate 6.2% 5.7%
The expected volatility was determined having regard to the historical four year volatility of Qantas shares and the implied volatility on
exchange traded options. The risk-free rate was the yield on a fi ve year Commonwealth Government bond. The expected life assumes immediate
exercise after vesting.
24. Share-based Payments
For personal use only