Twenty-First Century Fox 2007 Annual Report Download - page 95

NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
The following table summarizes information about the Company’s stock option transactions for all the Company’s stock option
plans (options in thousands):
Fiscal 2007 Fiscal 2006 Fiscal 2005
Options
Weighted average
exercise price Options
Weighted average
exercise price Options
Weighted average
exercise price
(in US$) (in A$) (in US$) (in A$) (in US$) (in A$)
Outstanding at the beginning of the year 110,881 $14.52 $24.50 131,367 $13.97 $23.35 143,849 $13.69 $23.13
Granted 256 17.72 * 935 16.36 * 1,519 14.04 18.70
Exercised (24,719) 11.04 18.59 (16,102) 10.32 16.74 (6,273) 10.09 15.96
Cancelled (1,060) 16.01 28.40 (5,319) 13.98 24.27 (7,728) 11.95 20.97
Outstanding at the end of the year 85,358 $15.52 $26.18 110,881 $14.52 $24.50 131,367 $13.97 $23.35
Vested and unvested expected to vest at
June 30, 2007 85,358
Exercisable at the end of the year 83,521 102,055 95,638
Weighted average fair value of options
granted $ 8.83 * $ 4.20 * $ 6.74 $ 8.66
* Granted in U.S. dollars.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the
following assumptions used for grants in fiscal years ended June 30:
2007 2006 2005
Weighted average risk free interest rate 4.50% 4.94% 4.08%
Dividend yield 0.7% 0.7% 0.9%
Expected volatility 26.98% 29.52% 35.38%
Maximum expected life of options 7 years 7 years 7 years
The fair value of each outstanding stock option award under the 2004 Plan was estimated on the date of grant using the Black-
Scholes option valuation model that uses the following assumptions: expected volatility was based on historical volatility of the
Class A Common Stock; expected term of stock options granted was derived from the historical activity of the Company’s stock
options and represented the period of time that stock options granted were expected to be outstanding; weighted average risk-free
interest rate was an average of the interest rates of U.S. government bonds with similar lives on the dates of the stock option grants;
and dividend yield was calculated as an average of a ten year history of the Company’s yearly dividend divided by the fiscal year’s
closing stock price.
The exercise prices for the stock options issued prior to the Reorganization in November 2004 are in Australian dollars. The U.S.
dollar equivalents presented above have been converted at historical exchange rates; therefore, the proceeds from the exercise of
these options may differ due to fluctuations in exchange rates in periods subsequent to the date of the grants.
The Company issued 1,325,000 SARs in both fiscal 2005 and fiscal 2004 at exercise prices of $15.20 and $12.99, respectively.
As of June 30, 2007, none of the SARs have been exercised and 593,750 of the SARs issued in fiscal 2005 and 890,625 of the SARs
issued in fiscal 2004 were vested and exercisable. No SARs have been issued since fiscal 2005.
The following table summarizes information about the Company’s stock option transactions (options in thousands):
Tranches
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
Exercisable
Options
Weighted
Average
Exercise
Price
(in US$) (in US$) (in US$)
$6.49 to $9.31 16,092 8.65 4.74 16,092 8.65
$9.96 to $14.70 41,979 12.91 3.93 40,392 12.89
$15.20 to $22.38 15,274 20.34 3.05 15,024 20.38
$23.25 to $27.74 12,013 27.74 2.35 12,013 27.74
85,358 $15.52 83,521 $15.56
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