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86 UNITED TECHNOLOGIES CORPORATION
nized in operating results. The associated future income tax benefit
recognized was $76 million, $75 million and $47 million for the
years ended December 31, 2012, 2011 and 2010, respectively.
For the years ended December 31, 2012, 2011 and 2010,
the amount of cash received from the exercise of stock options was
$381 million, $226 million and $386 million, respectively, with an
associated tax benefit realized of $111 million, $101 million and
$139 million, respectively. In addition, for the years ended
December 31, 2012, 2011 and 2010, the associated tax benefit
realized from the vesting of performance share units was $15 mil-
lion, $19 million and $20 million, respectively. Also, in accordance
with the Compensation—Stock Compensation Topic of the FASB
ASC, for the years ended December 31, 2012, 2011 and 2010, $67
million, $81 million and $94 million, respectively, of certain tax bene-
fits have been reported as operating cash outflows with
corresponding cash inflows from financing activities.
At December 31, 2012, there was $185 million of total
unrecognized compensation cost related to non-vested equity
awards granted under long-term incentive plans. This cost is
expected to be recognized ratably over a weighted-average period
of 1.9 years.
A summary of the transactions under all long-term incentive
plans for the year ended December 31, 2012 follows:
Stock Options Stock Appreciation Rights Performance Share Units Other
Incentive
Shares / Units(SHARES AND UNITS IN THOUSANDS) Shares
Average
Price* Shares
Average
Price* Units
Average
Price**
Outstanding at:
December 31, 2011 21,029 $ 47.63 34,038 $ 66.70 2,962 $ 67.31 1,109
Granted 428 75.47 7,909 74.88 1,159 74.71 467
Exercised/earned (7,546) 40.36 (2,645) 60.70 (607) 55.82 (207)
Cancelled (105) 50.93 (881) 70.88 (723) 60.03 (85)
December 31, 2012 13,806 $ 52.45 38,421 $ 68.70 2,791 $ 74.77 1,284
* weighted-average exercise price
** weighted-average grant stock price
The weighted-average grant date fair value of stock options
and stock appreciation rights granted during 2012, 2011 and 2010
was $19.32, $20.26 and $17.86, respectively. The weighted-
average grant date fair value of performance share units, which vest
upon achieving certain performance metrics, granted during 2012,
2011, and 2010 was $82.15, $87.65 and $78.73, respectively. The
total fair value of awards vested during the years ended
December 31, 2012, 2011 and 2010 was $187 million, $170 million
and $172 million, respectively. The total intrinsic value (which is the
amount by which the stock price exceeded the exercise price on
the date of exercise) of stock options and stock appreciation rights
exercised during the years ended December 31, 2012, 2011 and
2010 was $370 million, $336 million and $446 million, respectively.
The total intrinsic value (which is the stock price at vesting) of per-
formance share units vested was $46 million, $59 million and $62
million during the years ended December 31, 2012, 2011 and
2010, respectively.
The following table summarizes information about equity
awards outstanding that are vested and expected to vest and
equity awards outstanding that are exercisable at December 31,
2012:
Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable
(SHARES IN THOUSANDS, AGGREGATE INTRINSIC VALUE IN MILLIONS) Awards
Average
Price*
Aggregate
Intrinsic
Value
Remaining
Term** Awards
Average
Price*
Aggregate
Intrinsic
Value
Remaining
Term**
Stock Options/Stock Appreciation Rights 51,737 $ 63.90 $ 937 5.2 35,142 $ 58.44 $ 828 3.7
Performance Share Units/Restricted Stock 3,645 – 299 1.2
* weighted-average exercise price per share
** weighted-average contractual remaining term in years
The fair value of each option award is estimated on the
date of grant using a binomial lattice model. The following table
indicates the assumptions used in estimating fair value for the years
ended December 31, 2012, 2011 and 2010. Lattice-based option
models incorporate ranges of assumptions for inputs, those ranges
are as follows:
2012 2011 2010
Expected volatility 30% – 35% 26% – 32% 24% – 28%
Weighted-average volatility 30% 26% 25%
Expected term (in years) 7.4 – 7.7 7.5 – 8.0 7.4 – 7.9
Expected dividends 2.3% 2.4% 2.7%
Risk-free rate 0.0% – 2.0% 0.1% – 3.5% 0.1% – 4.0%