Halliburton 2015 Annual Report Download - page 86

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69
The weighted average grant-date fair value of shares granted during 2014 was $58.21 and during 2013 was $42.93.
The total fair value of shares vested during 2015 was $211 million, during 2014 was $278 million, and during 2013 was $208
million. As of December 31, 2015, there was $507 million of unrecognized compensation cost, net of estimated forfeitures,
related to nonvested restricted stock, which is expected to be recognized over a weighted average period of three years.
Employee Stock Purchase Plan
Under the ESPP, eligible employees may have up to 10% of their earnings withheld, subject to some limitations, to be
used to purchase shares of our common stock. The ESPP contains four three-month offering periods commencing on January 1,
April 1, July 1, and October 1 of each year. The price at which common stock may be purchased under the ESPP is equal to
85% of the lower of the fair market value of the common stock on the commencement date or last trading day of each offering
period. Under this plan, 74 million shares of common stock have been reserved for issuance. The stock to be offered may be
authorized but unissued common shares or treasury shares. As of December 31, 2015, 40 million shares have been sold through
the ESPP since the inception of the plan and 34 million shares are available for future issuance.
The fair value of ESPP shares was estimated using the Black-Scholes option pricing model. The expected volatility
was a one-year historical volatility of our common stock. The assumptions and resulting fair values were as follows:
Year Ended December 31
2015 2014 2013
Expected volatility 35% 23% 27%
Expected dividend yield 1.82% 1.07% 1.12%
Risk-free interest rate 0.01% 0.04% 0.06%
Weighted average grant-date fair value per share $ 8.62 $ 11.80 $ 8.40
Note 13. Income per Share
Basic income or loss per share is based on the weighted average number of common shares outstanding during the
period. Diluted income per share includes additional common shares that would have been outstanding if potential common
shares with a dilutive effect had been issued. Antidilutive securities represent potentially dilutive securities which are excluded
from the computation of diluted income or loss per share as their impact was antidilutive.
A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows:
Year Ended December 31
Millions of shares 2015 2014 2013
Basic weighted average common shares outstanding 853 848 898
Dilutive effect of awards granted under our stock incentive plans
—
4 4
Diluted weighted average common shares outstanding 853 852 902
Antidilutive shares:
Options with exercise price greater than the average market price 10 2 3
Options which ordinarily would be considered dilutive if not for
being in net loss position 2
—
—
Total antidilutive shares 12 2 3
Note 14. Financial Instruments and Risk Management
At December 31, 2015, we held $96 million of investments in fixed income securities with maturities ranging from
less than one year to January 2018, of which $63 million are classified as “Other current assets” and $33 million are classified
as “Other assets” on our consolidated balance sheets. At December 31, 2014, we held $103 million of investments in fixed
income securities, of which $56 million are classified as "Other current assets" and $47 million are classified as "Other assets"
on our consolidated balance sheets.
These securities consist primarily of corporate bonds and other debt instruments, are accounted for as available-for-
sale and recorded at fair value, and are classified as Level 2 assets. Level 2 asset fair values are based on quoted prices for
identical assets in less active markets. We have no financial instruments measured at fair value based on quoted prices in active
markets (Level 1) or unobservable inputs (Level 3). The carrying amount of cash and equivalents, receivables, and accounts
payable, as reflected in the consolidated balance sheets, approximates fair value due to the short maturities of these instruments.