Seagate 2015 Annual Report Download - page 106

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TableofContents
SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
ThefairvalueoftheCompany'ssharesrelatedtooptionsgrantedtoemployees,sharesissuedfromtheESPPandperformanceawardssubjecttoTSR/ROIC
conditionsforfiscalyears2016,2015and2014wereestimatedusingthefollowingassumptions:
StockCompensationExpense
TheCompanyrecorded$120million,$137millionand$118millionofshare-basedcompensationduringfiscalyears2016,2015,and2014,respectively.
Managementhasmadeanestimateofexpectedforfeituresandisrecognizingcompensationcostsonlyforthoseequityawardsexpectedtovest.Whenestimating
forfeitures,theCompanyconsidersvoluntaryterminationbehavioraswellasanalysisofactualforfeitedawards.
103
 FiscalYears
 2016 2015 2014
Options  
Expectedterm(inyears) 2.1–4.2  4.2  4.2
Volatility 33–48%  33–35%  35–41%
Weighted-averagevolatility 36%  34%  40%
Expecteddividendrate  4.6–11.0%  2.9–4.0%  3.1–3.8%
Weighted-averageexpecteddividendrate 5.6%  3.0%  3.7%
Risk-freeinterestrate 0.6–1.5%  1.1–1.5%  1.2–1.4%
Weighted-averagefairvalue $12.28  $12.98  $10.41
ESPP  
Expectedterm(inyears) 0.5  0.5  0.5
Volatility 28–46%  28–29%  34–36%
Weighted-averagevolatility 39%  28%  35%
Expecteddividendrate 4.6–8.3%  3.0–3.8%  3.3–3.5%
Weighted-averageexpecteddividendrate 6.9%  3.4%  3.4%
Risk-freeinterestrate 0.5%  0.1%  0.1%
Weighted-averagefairvalue $9.08  $12.21  $10.46
Performancerestrictedshareawardssubjecttomarketcondition  
Expectedterm(inyears) 3.00  3.00  3.00
Weighted-averagevolatility 30%  40%  46%
Expecteddividendrate 4.3%  2.8%  3.8%
Risk-freeinterestrate 1.1%  1.1%  0.9%
Weighted-averagefairvalue $47.34  $58.31  $37.51