Computer Associates 2015 Annual Report Download - page 91

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The weighted average estimated values of employee stock option grants, as well as the weighted average assumptions that
were used in calculating such values during fiscal years 2015, 2014 and 2013 were based on estimates at the date of grant as
follows:
YEAR ENDED MARCH 31,
2015 2014 2013
Weighted average fair value $ 5.61 $ 5.20 $ 4.26
Dividend yield 3.32% 4.05% 4.06%
Expected volatility factor(1) 27% 30% 31%
Risk-free interest rate(2) 2.0% 1.5% 1.0%
Expected life (in years)(3) 6.0 6.0 4.9
(1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from
the market prices of the Company’s traded options.
(2) The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.
(3) The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Company’s computation of expected life was determined
based on the simplified method (the average of the vesting period and option term).
The following table summarizes information on options exercised for the periods indicated:
YEAR ENDED MARCH 31,
(in millions) 2015 2014 2013
Cash received from options exercised $ 22 $ 88 $ 21
Intrinsic value of options exercised $ 3 $ 19 $ 10
Restricted Stock Awards and Restricted Stock Unit Awards: Restricted Stock Awards (RSAs) are shares of common stock
awarded to employees, subject to restrictions on transfer and subject to forfeiture until the awards vest, typically over a
three-year period. RSAs entitle holders to vote and receive dividends on the shares awarded. The fair value of the awards is
determined and fixed based on the closing market value of the Company’s stock on the grant date.
Restricted Stock Units (RSUs) are awards issued to employees that entitle the holder to receive shares of common stock as
the awards vest, typically over a three-year period. RSUs do not entitle holders to vote or receive dividends on the shares
underlying the RSUs. The fair value of the awards is determined and fixed based on the market value of the Company’s
stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s stock prior to
vesting of the RSUs, which is calculated using a risk-free interest rate.
The following table summarizes the activity of RSAs and RSUs under the Plans:
RSAs RSUs
WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES GRANT DATE FAIR SHARES GRANT DATE FAIR
(in millions) VALU E (in millions) VA LU E
Outstanding at March 31, 2012 5.7 $ 22.41 1.2 $ 21.91
Granted 3.5 26.21 0.9 23.72
Released (3.6) 22.22 (0.6) 21.03
Forfeitures (0.6) 24.69 (0.1) 23.38
Outstanding at March 31, 2013 5.0 $ 24.98 1.4 $ 23.28
Granted 2.7 27.06 0.7 25.45
Released (2.6) 24.49 (0.6) 23.01
Forfeitures (0.8) 26.14 (0.1) 24.41
Outstanding at March 31, 2014 4.3 $ 26.38 1.4 $ 24.47
Granted 3.1 28.97 0.8 26.99
Released (2.2) 26.36 (0.6) 24.64
Forfeitures (0.9) 27.79 (0.2) 25.59
Outstanding at March 31, 2015 4.3 $ 27.99 1.4 $ 25.74
The total fair value on the vesting date of RSAs and RSUs released during fiscal years 2015, 2014 and 2013 was
approximately $75 million, $77 million and $92 million, respectively.
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