Aetna 2013 Annual Report Download - page 129

Download and view the complete annual report

Please find page 129 of the 2013 Aetna 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

Annual Report- Page 123
The following is a summary of information regarding stock options, SARs and PSARs outstanding at
December 31, 2013:
Outstanding Exercisable
Range of
Exercise Prices Number
Outstanding
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value Number
Exercisable
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
$10.00-$20.00 .5 .1 $ 19.38 $ 24.2 .5 $ 19.38 $ 24.2
20.00-30.00 .1 3.7 26.30 2.4 .1 26.30 2.4
30.00-40.00 2.8 3.6 32.87 100.4 2.8 32.87 100.4
40.00-50.00 2.8 2.9 43.65 68.8 2.8 43.65 68.8
50.00-60.00 3.6 3.1 50.49 65.8 3.6 50.49 65.8
60.00-70.00 .7 9.6 64.25 3.0 — — —
$10.00-$70.00 10.5 3.5 $ 43.27 $ 264.6 9.8 $ 41.77 $ 261.6
The grant date fair values of RSUs and PSUs are based on the market price of our common stock on the date of
grant. Beginning in 2010, we granted MSUs to certain employees. We estimate the grant date fair value of
MSUs using a Monte Carlo simulation. MSUs granted in 2013 had a weighted average per MSU grant date fair
value of $49.31. MSUs granted in 2012 were valued using two separate performance periods, which resulted in a
weighted average per MSU grant date fair value of $46.36 and $46.84, respectively, for the two-year and three-
year vesting period tranches. MSUs granted in 2011 had a weighted average per MSU grant date fair value of
$38.79. The weighted-average per MSU grant date fair values listed above were calculated using the assumptions
noted in the following table:
2012
2013 Two-year Three-year 2011
Dividend yield 1.7% 1.6% 1.6% 1.6%
Historical volatility 28.8% 30.3% 39.7% 36.5%
Risk-free interest rate .4% .2% .3% .6%
Initial price $ 48.48 $ 44.79 $ 44.79 $ 36.87
The annualized volatility of the price of our common stock was calculated over the three-year period preceding
the grant date for MSUs granted in 2013. As the MSUs granted in 2012 have two separate performance periods
(two years and three years), the annualized volatility of the price of our common stock was calculated over the
two-year and three-year periods preceding the grant date. The annualized volatility of the price of our common
stock was calculated over the 22 month period preceding the grant date for the MSUs granted in 2011. The risk-
free interest rates for periods within the expected life of the MSUs are based on a constant maturity yield curve in
effect on the grant date for MSUs granted in 2013 and 2012 and a 22 month interpolated U.S. Treasury rate in
effect on the date of grant for the the MSUs granted during 2011. The dividend yield assumptions for 2013, 2012
and 2011, respectively, were based on our expected 2013, 2012 and 2011 annual dividend payout, respectively.