Qantas 2013 Annual Report Download - page 136

134
A LONG TERM INCENTIVE PLAN LTIP
The LTIP is specically targeted to Senior Executives in key roles or other participants who have been identied as high potential
Executives. All Rights are redeemable on a one-for-one basis for Qantas shares, subject to the achievement of performance
hurdles. Dividends are not payable on the Rights.
Number of Rights
Performance Rights Reconciliation 2013 2012
Rights outstanding as at 1 July 18,631,168 12,213,069
Rights granted 15,969,000 10,127,000
Rights forfeited (2,066,000) (1,110,560)
Rights lapsed (4,343,801) (2,481,256)
Rights exercised (16,320) (117,085)
Rights outstanding as at 30 June 28,174,047 18,631,168
Rights exercisable as at 30 June 275,047 291,367
During the year, 15,640,000 Rights were granted on 2 November 2012 and 329,000 granted on 13 June 2013 (2012: 8,277,000 Rights were
granted on 23 August 2011 and 1,850,000 Rights were granted on 28 October 2011). No amount has been paid, or is payable, bythe
Executive in relation to these Rights. Performance hurdles in relation to the outstanding Rights at 30 June 2013 were tested as at
30June 2013. As a result, 3,755,000 Rights will lapse from the 2011-2013 LTIP award subsequent to 30 June 2013 (2012: 1,221,500 Rights
from the 2007 Performance Rights Plan and 3,122,301 Rights from the 2010-2012 LTIP award lapsed in 2012/2013).
During the year 16,320 Rights were exercised (2012: 117,085).
At 30 June 2013, 23,590 Rights are available to be exercised at the request of the Executive under the 2004/05 Performance
Rights Plan (2004/05 PRP), 63,246Rights under the 2005 Performance Rights Plan (2005 PRP) and a further 188,211 Rights under
the 2006Performance Rights Plan (2006 PRP) (2012: 23,590 Rights under the 2004/05 PRP, 64,580 Rights under 2005 PRP and
203,197Rights under the 2006 PRP). For more information on the operation of the LTIP, see pages 87 to 88.
FAIR VALUE CALCULATION
The estimated fair value of Rights granted with the Total Shareholder Return (TSR) performance hurdle component was determined
at grant date using a Monte Carlo model.
The weighted average fair value of Rights granted during the year was $0.88 (2012: $0.85).
2013 2012
Inputs into the Models 13 June
2013
2 November
2012
28 October
2011
23 August
2011
Weighted average share value $1.36 $1.30 $1.53 $1.51
Expected volatility 35% 40% 35% 35%
Dividend yield 2.5% 0.5% 1.8% 2.4%
Risk-free interest rate 2.6% 2.6% 3.9% 3.7%
The expected volatility for the 2012-2015 LTIP 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 2013:
2013 2012
Shares Granted Number
of Shares
Weighted
Average
Fair Value $
Number
of Shares
Weighted
Average
Fair Value $
2011/12 STIP shares granted – 22 August 2012 438,243 1.17 – –
2010/11 STIP shares granted – 31 August 2011 – – 5,781,457 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 specically 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 83 to 87.
25. Share-based Payments
continue
d
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2013