Qantas 2012 Annual Report Download - page 108
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FOR THE YEAR ENDED 30 JUNE 2012
Notes to the Financial Statements continued
FAIR VALUE CALCULATION
The estimated value of Rights granted with the Total Shareholder Return (TSR) performance hurdle component was determined
at grant date using a Monte Carlo model.
A Black Scholes model was used to value the Rights with the Earnings Per Share (EPS) performance hurdle. The weighted average
fair value of Rights granted during the year was $0.85 (2011: $1.56).
2012 2011
Inputs into the Models
28 October
2011
23 August
2011
29 October
2010
12 August
2010
Weighted average share value $. $. $. $.
Expected volatility % % % %
Dividend yield .% .% .% .%
Risk-free interest rate .% .% .% .%
The expected volatility for the 2011/2012 award was determined having regard to the historical one year volatility of Qantas shares
and the implied volatility on exchange traded options. The risk-free rate was the yield on an Australian Government Bond at the
grant date matching the remaining life of the plan. The yield is converted into a continuously compounded rate in the model.
The expected life assumes immediate exercise after vesting.
B SHORT TERM INCENTIVE PLAN STIP
The following awards were made under the STIP during the year ended 30 June 2012:
2012 2011
Shares Granted
Number of
Shares
Weighted
Average
Fair Value
$
Number of
Shares
Weighted
Average
Fair Value
$
Performance shares granted – August ,, . – –
Performance shares granted – August – – ,, .
Shares are valued based on the volume weighted average price of Qantas shares as traded on the ASX for the seven calendar days
up to and including the date of allocation. Expected dividends are not specifically taken into account when calculating the fair value
but are implicit in the weighted average price of Qantas shares. Shares are issued or purchased on-market and are held subject to
a restriction period. For further detail on the operation of the STIP, see pages 50 to 54.
C MANAGEMENT INCENTIVE PLAN MIP
The following awards were made under the MIP during the year ended 30 June 2012:
2012 2011
Shares Granted
Number of
Shares
Weighted
Average
Fair Value
$
Number of
Shares
Weighted
Average
Fair Value
$
Performance shares granted – 31 August 2011 4,923,441 1.58 – –
Shares are valued based on the volume weighted average price of Qantas shares as traded on the ASX for the seven calendar days
up to and including the date of allocation. Expected dividends are not specifically taken into account when calculating the fair value
but are implicit in the weighted average price of Qantas shares. Shares are issued or purchased on-market and are held subject to
a restriction period.
24. Share-based Payments continued
QANTAS ANNUAL REPORT 2012106