Alaska Airlines and Horizon Air 2014 Annual Report Download - page 178

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The tables below summarize stock option activity:
Shares
Weighted-
Average
Exercise
Price
Per Share
Weighted-
Average
Contractual
Life (Years)
Aggregate
Intrinsic
Value (in
millions)
Outstanding, December 31, 2013 1,143,684 $ 14.25 6.6 $ 26
Granted 143,050 40.01
Exercised (573,140) 11.39
Forfeited or expired (5,906) 38.76
Outstanding, December 31, 2014 707,688 $ 21.57 6.4 $ 27
Exercisable, December 31, 2014 243,726 $ 12.32 5.4 $ 12
Vested or expected to vest, December 31, 2014 706,748 $ 21.56 6.4 $ 27
(in millions) 2014 2013 2012
Intrinsic value of option exercises $20$19$11
Cash received from stock option exercises 687
Tax benefit related to stock option exercises 774
Fair value of options vested 234
Stock Awards
Restricted Stock Units (RSUs) are awarded to eligible employees and entitle the grantee to receive
shares of common stock at the end of the vest period. The fair value of the RSUs is based on the stock
price on the date of grant. The RSUs “cliff vest” after three years, or the period from the date of grant
to the employee’s retirement eligibility, and expense is recognized accordingly. Performance Share Units
(PSUs) are awarded to certain executives to receive shares of common stock if specific performance
goals and market conditions are achieved. There are several tranches of PSUs which vest when
performance goals and market conditions are met.
The following table summarizes information about outstanding stock awards:
Number
of Units
Weighted-
Average
Grant
Date Fair
Value
Weighted-
Average
Contractual
Life (Years)
Aggregate
Intrinsic
Value (in
millions)
Non-vested, December 31, 2013 1,278,430 $ 19.58 0.6 $ 47
Granted 400,650 31.85
Vested (630,390) 16.53
Forfeited (21,300) 19.48
Non-vested, December 31, 2014 1,027,390 $ 26.19 0.6 $ 61
Deferred Stock Awards
Deferred Stock Units (DSUs) are awarded to members of its Board of Directors as part of their retainers.
The underlying common shares are issued upon retirement from the Board, but require no future service
period. As a result, the entire intrinsic value of the awards is expensed on the date of grant.
94