BT 2012 Annual Report Download - page 141

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138 Financial statements
Notes to the consolidated financial statements
The options outstanding under Employee Sharesave plans at 31 March 2012 have weighted average remaining contractual lives as follows:
Employee Sharesave plans
Weighted
Weighted Number of average
average outstanding remaining
exercise options contractual
Range of exercise prices price millions life
61p 61p 316 34 months
68p 68p 115 10 months
104p–185p 125p 125 38 months
262p 262p 5 10 months
Total 79p 561 30 months
During 2012 1m (2011: 5m, 2010: 4m) options were forfeited, 2m (2011: nil, 2010: nil) options exercised and 2m (2011: 4m, 2010: nil) options
expired under former executive share option plans (GSOP and GLOP). Under these plans 24m (2011: 29m, 2010: 38m) options were outstanding
at the end of the year and are exercisable up to 2015. The weighted average exercise price of the outstanding options was 198p (2011: 207p,
2010: 255p). At 31 March 2012 outstanding options under GSOP and GLOP had a weighted average remaining contractual life of 17 months.
Executive share plans
Movements in executive share plans during 2012 are shown below:
Number of shares (millions)
ISP DBP RSP Total
At 1 April 2011 114.5 18.7 0.3 133.5
Awards granted 30.0 6.7 0.3 37.0
Awards vested – (5.5) (0.2) (5.7)
Awards lapsed (35.2) (0.9) – (36.1)
Dividend shares reinvested 4.9 0.9 – 5.8
At 31 March 2012 114.2 19.9 0.4 134.5
At 31 March 2012, 0.1m shares (2011: 0.3m) were held in trust and 134.4m shares (2011: 133.2m) were held in treasury for executive share plans.
Fair values
The following table summarises the fair values and key assumptions used for valuing grants made under the Employee Sharesave plans and ISP in
2012, 2011 and 2010.
2012 2011 2010
Employee Employee Employee
Year ended 31 March Sharesave ISP Sharesave ISP Sharesave ISP
Weighted average fair value 44p 170p 34p 108p 14p 106p
Weighted average share price 198p 198p 138p 134p 80p 131p
Weighted average exercise price 161p – 107p – 63p –
Expected dividend yield 5.3%–5.5% 5.3% 5.4%–5.8% 5.4% 5.7%–6.4% 6.5%
Risk free rates 1.1%–2.0% 1.1% 1.2%–2.2% 1.2% 2.2%–2.8% 2.5%
Expected volatility 31.0%–35.6% 31.2% 34.4%–41.4% 34.4% 26.9%–30.7% 38.5%
Employee Sharesave grants are valued using a Binomial options pricing model. Awards under the ISP are valued using Monte Carlo simulations.
TSRs were generated for BT and the comparator group at the end of the three-year performance period, using each company’s volatility and
dividend yield, as well as the cross correlation between pairs of stocks.
21. Share-based payments continued
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