Boeing 2013 Annual Report Download - page 107

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95
The total intrinsic value of options exercised was $546, $89 and $67 during the years ended December
31, 2013, 2012 and 2011, respectively. Cash received from options exercised for the years ended December
31, 2013, 2012 and 2011 was $1,097, $120 and $114 with a related tax benefit of $190, $29 and $23,
respectively, derived from the compensation deductions resulting from these option exercises. At
December 31, 2013, there was $95 of total unrecognized compensation cost related to our stock option
plan which is expected to be recognized over a weighted average period of 1.8 years. The grant date fair
value of stock options vested during the years ended December 31, 2013, 2012 and 2011 was $89, $83
and $92, respectively.
The fair values of options were estimated using the Black-Scholes option-pricing model with the following
assumptions:
Grant Year Grant Date
Expected
Life
Expected
Volatility
Expected
Dividend
Yield
Risk Free
Interest Rate
Weighted-Average
Grant Date Fair
Value Per Share
2013 2/25/2013 6 years 29.0% 2.6% 1.0% $15.85
2012 2/27/2012 6 years 29.9% 2.4% 1.1% $16.89
2011 2/22/2011 6 years 29.8% 2.3% 2.5% $17.96
The expected volatility of the stock options is based on a combination of our historical stock volatility and
the volatility levels implied on the grant date by actively traded option contracts on our common stock. We
determined the expected term of the stock option grants to be six years, calculated using the “simplified”
method in accordance with the SEC Staff Accounting Bulletin 110. We use the “simplified” method since
we changed the vesting terms, tax treatment and the recipients of our stock options beginning in 2006
such that we believe our historical data prior to 2006 does not provide a reasonable basis upon which to
estimate expected term and we do not have enough option exercise data from our grants issued subsequent
to 2006 to support our own estimate as a result of vesting terms and changes in the stock price.
Restricted Stock Units
In February 2013, 2012 and 2011, we granted to our executives 1,375,414, 1,369,810 and 1,364,440
restricted stock units (RSUs) as part of our long-term incentive program with grant date fair values of
$75.97, $75.40 and $71.44 per share, respectively. The RSUs granted under this program will vest and
settle in common stock (on a one-for-one basis) on the third anniversary of the grant date. If an executive
terminates employment because of retirement, involuntary layoff, disability, or death, the employee (or
beneficiary) will immediately vest on a proration of stock units based on active employment during the
three-year service period. In all other cases, the RSUs will not vest and all rights to the stock units will
terminate completely. In addition to RSUs awarded under our long-term incentive program, we grant RSUs
to certain executives and employees to encourage retention or to reward various achievements. These
RSUs are labeled other restricted stock units in the table below. The fair values of all RSUs are estimated
using the average stock price on the date of grant. Stock units settle in common stock on a one-for-one
basis and are not contingent upon stock price.