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92
QANTAS ANNUAL REPORT 2014
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2014
24. SHARE-BASED PAYMENTS CONTINUED
FAIR VALUE CALCULATION
The estimated value of Rights granted was determined at grant date using a Monte Carlo model.
The weighted average fair value of Rights granted during the year was $0.83 (2013: $0.88).
Inputs into the models
2014 2013
18 October
2013
13 June
2013
2 November
2012
Weighted average share value $1.43 $1.36 $1.30
Expected volatility 35% 35% 40%
Dividend yield 1.5% 2.5% 0.5%
Risk-free interest rate 2.9% 2.6% 2.6%
The expected volatility for the 2012–2014 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 of Qantas shares were made under the STIP during the year ended 30 June 2014:
Shares granted
2014 2013
Number of
Shares
Weighted
Average
Fair Value $
Number of
Shares
Weighted
Average
Fair Value $
2013/14 STIP shares granted – 6 September 2013 794,470 1.36 – –
2011/12 STIP shares granted – 22 August 2012 – – 438,243 1.17
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 two
year restriction period. For further detail on the operation of the STIP, see pages 51 to 55.
(C) MANAGER INCENTIVE PLAN (MIP)
There were no awards of Qantas shares made under the MIP during the year ended 30 June 2014.
2014 2013
Number of
Shares
Weighted
Average
Fair Value $
Number of
Shares
Weighted
Average
Fair Value $
2013/14 MIP shares granted – – – –
2011/12 MIP shares granted – – 12,152,320 1.17
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.