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Baker Hughes Incorporated
Notes to Consolidated Financial Statements
63
The following table presents the changes in stock options outstanding and related information (in thousands,
except per option prices):
Number of
Options
Weighted Average
Exercise Price
Per Option
Outstanding at December 31, 2014 9,737 $ 53.80
Granted — —
Exercised (873) 44.25
Forfeited (124) 53.90
Expired (138) 67.85
Outstanding at December 31, 2015 8,602 $ 54.56
Exercisable at December 31, 2015 7,363 $ 54.46
The weighted average remaining contractual term for options outstanding and options exercisable at
December 31, 2015 were 4.7 years and 4.2 years, respectively.
The total intrinsic value of stock options (defined as the amount by which the market price of our common stock
on the date of exercise exceeds the exercise price of the option) exercised in 2015, 2014 and 2013 was $15 million,
$70 million and $11 million, respectively. The income tax benefit realized from stock options exercised was $3.8
million, $19.6 million and $2.0 million in 2015, 2014 and 2013, respectively.
The total fair value of options vested in 2015, 2014 and 2013 was $24 million, $29 million and $31 million,
respectively. As of December 31, 2015, there was $5 million of total unrecognized compensation cost related to
unvested stock options, which is expected to be recognized over a weighted average period of one year.
The total intrinsic value of stock options outstanding at December 31, 2015 was $15.1 million, of which $14.8
million relates to options vested and exercisable. The intrinsic value for stock options outstanding is calculated as
the amount by which the quoted price of $46.15 of our common stock as of the end of 2015 exceeds the exercise
price of the options.
Restricted Stock Awards and Units
In addition to stock options, our officers, directors and key employees may be granted restricted stock awards
(“RSA”), which is an award of common stock with no exercise price, or restricted stock units (“RSU”), where each
unit represents the right to receive, at the end of a stipulated period, one unrestricted share of stock with no
exercise price. RSAs and RSUs are subject to cliff or graded vesting, generally ranging over a three year period, or
over a one year period for non-employee directors. We determine the fair value of restricted stock awards and
restricted stock units based on the market price of our common stock on the date of grant. The following table
presents the combined changes of RSAs and RSUs and related information (in thousands, except per award/unit
prices):
Number of
Awards
and Units
Weighted Average
Grant Date Fair
Value Per Award/Unit
Unvested balance at December 31, 2014 2,732 $ 57.88
Granted 2,314 57.37
Vested (1,299) 55.09
Forfeited (391) 54.62
Unvested balance at December 31, 2015 3,356 $ 58.99