Public Storage 2014 Annual Report Download - page 101

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PUBLIC STORAGE
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
F-25
amortized on a straight-line basis over the service period. For awards with performance conditions, the
individual cost of each vesting is amortized separately over each individual service period (the “accelerated
attribution” method).
Stock Options
Stock options vest over a three to five-year period, expire ten years after the grant date, and the
exercise price is equal to the closing trading price of our common shares on the grant date. Employees cannot
require the Company to settle their award in cash. We use the Black-Scholes option valuation model to
estimate the fair value of our stock options.
Outstanding stock option grants are included on a one-for-one basis in our diluted weighted average
shares, to the extent dilutive, after applying the treasury stock method (based upon the average common share
price during the period) to assumed exercise proceeds and measured but unrecognized compensation.
The stock options outstanding at December 31, 2014 have an aggregate intrinsic value (the excess, if
any, of each option’s market value over the exercise price) of approximately $152.0 million and remaining
average contractual lives of approximately six years. Other than stock options granted in 2014, all stock options
outstanding at December 31, 2014 have exercise prices of $165 or less. The aggregate intrinsic value of
exercisable stock options at December 31, 2014 amounted to approximately $135.3 million.
Additional information with respect to stock options during 2014, 2013 and 2012 is as follows:
2014
2013
2012
Weighted
Weighted
Weighted
Average
Average
Average
Number
Exercise
Number
Exercise
Number
Exercise
of
Price
of
Price
of
Price
Options
per Share
Options
per Share
Options
per Share
Options outstanding January 1,
2,174,211
$
85.49
2,253,510
$
76.14
2,591,066
$
74.30
Granted
485,000
176.74
235,000
153.89
35,000
144.97
Exercised
(570,417)
66.39
(286,299)
71.06
(341,156)
68.26
Cancelled
(3,250)
63.76
(28,000)
55.25
(31,400)
55.54
Options outstanding December 31,
2,085,544
$
111.96
2,174,211
$
85.49
2,253,510
$
76.14
Options exercisable at December 31,
1,321,537
$
82.46
1,581,954
$
76.29
1,401,883
$
76.23