Time Magazine 2011 Annual Report Download - page 108

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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Other information pertaining to each category of equity-based compensation appears below.
Stock Options
The assumptions presented in the table below represent the weighted-average value of the applicable
assumption used to value stock options at their grant date.
Year Ended December 31,
2011 2010 2009
Expected volatility ................................... 29.5% 29.5% 35.2%
Expected term to exercise from grant date ................. 6.31 years 6.51 years 6.11 years
Risk-free rate ....................................... 2.8% 2.9% 2.5%
Expected dividend yield ............................... 2.6% 3.1% 4.4%
The following table summarizes information about stock options outstanding as of December 31, 2011:
Number
of Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
(thousands) (in years) (thousands)
Outstanding as of December 31, 2010 .......... 134,211 $48.23
Granted .................................. 8,381 36.07
Exercised ................................ (8,142) 25.96
Forfeited or expired ........................ (33,336) 91.37
Outstanding as of December 31, 2011 .......... 101,114 34.80 4.17 $430,199
Exercisable as of December 31, 2011 .......... 78,146 36.84 3.03 $239,863
As of December 31, 2011, the number, weighted-average exercise price, aggregate intrinsic value and
weighted-average remaining contractual term of Time Warner stock options vested and expected to vest
approximate amounts for options outstanding. As of December 31, 2011, 56 million shares of Time Warner
common stock were available for future grants of stock options. Total unrecognized compensation cost related to
unvested Time Warner stock option awards as of December 31, 2011, without taking into account expected
forfeitures, is $66 million and is expected to be recognized over a weighted-average period between one and two
years.
The weighted-average fair value of a Time Warner stock option granted during the years ended
December 31, 2011, 2010 and 2009 was $9.01, $6.39 and $5.07, respectively. The total intrinsic value of Time
Warner stock options exercised during the years ended December 31, 2011, 2010 and 2009 was $80 million, $45
million and $13 million, respectively. Cash received from the exercise of Time Warner stock options was $204
million, $121 million and $56 million for the years ended December 31, 2011, 2010 and 2009, respectively. The
tax benefits realized from Time Warner stock options exercised in the years ended December 31, 2011, 2010 and
2009 were $30 million, $17 million and $5 million, respectively.
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