Apple 2012 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2012 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 88

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88

Stock Option Activity
AsummaryoftheCompany’sstockoptionactivityandrelatedinformationfor2012,2011,and2010,isasfollows:
Outstanding Options
Number of
Options
(in thousands)
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value
(in millions)
Balance at September 26, 2009 ........................ 34,375 $ 81.17
Optionsgranted................................. 34 $202.00
Optionsassumed................................ 98 $ 11.99
Options cancelled ............................... (430) $136.27
Options exercised ............................... (12,352) $ 62.69
Balance at September 25, 2010 ........................ 21,725 $ 90.46
Options granted ................................. 1 $342.62
Options cancelled ............................... (163) $128.42
Options exercised ............................... (9,697) $ 67.63
Balance at September 24, 2011 ........................ 11,866 $108.64
Optionsassumed................................ 41 $ 30.86
Options cancelled ............................... (25) $103.22
Options exercised ............................... (5,337) $ 84.85
Balance at September 29, 2012 ........................ 6,545 $127.56 1.9 $3,531
Exercisable at September 29, 2012 ...................... 6,505 $128.03 1.8 $3,507
Expected to vest after September 29, 2012 . . . . . . . . . . . . . . . 40 $ 51.07 6.7 $ 24
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the
fiscal period in excess of the weighted-average exercise price multiplied by the number of options outstanding or
exercisable. Total intrinsic value of options at time of exercise was $2.3 billion, $2.6 billion and $2.0 billion for
2012, 2011 and 2010, respectively.
Share-based Compensation
Share-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s
common stock on the date of grant. Share-based compensation cost for stock options and employee stock
purchase plan rights (“stock purchase rights”) is estimated at the grant date and offering date, respectively, based
on the fair-value as calculated by the BSM option-pricing model. The BSM option-pricing model incorporates
various assumptions including expected volatility, estimated expected life and interest rates. The Company
recognizes share-based compensation cost as expense on a straight-line basis over the requisite service period.
The Company did not grant any stock options during 2012. The Company granted 1,370 and 34,000 stock
options during 2011 and 2010, respectively. The weighted-average grant date fair value per share of stock
options granted during 2011 and 2010 was $181.13 and $108.58, respectively.
During 2012 and 2010, in conjunction with certain business combinations, the Company assumed 41,000 and
98,000 stock options, respectively, which had a weighted-average fair value per share of $405.39 and $216.82,
respectively. The Company did not assume any stock options during 2011.
The weighted-average fair value of stock purchase rights per share was $108.44, $71.47 and $45.03 during 2012,
2011 and 2010, respectively.
67