Annual Report 2010 in PDF - BBA Aviation

Financial statements Notes to the Consolidated Financial Statements – continued
85 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Consolidated
Financial Statements
22. Share-based payments – continued
(ii) Share awards
Details of the conditional share awards outstanding during the year are as follows:
86 Consolidated Income 2010 2009
Statement Number Number
87 Consolidated Statement of
of shares of shares
Comprehensive Income Outstanding at the beginning of the year 19,534,541 8,531,812
88 Consolidated Balance Sheet Granted during the year 2,511,169 13,941,031
89 Consolidated Cash Flow
Statement
Exercised during the year
Lapsed during the year
(132,994)
(3,907,397)
(587,128)
(2,351,174)
90 Consolidated Statement of
Changes in Equity Outstanding at the end of the year 18,005,319 19,534,541
91 Accounting Policies of
the Group
95 Notes to the Consolidated
Financial Statements
126 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Parent Company
Financial Statements
127 Company Balance sheet
128 Accounting Policies of
the Company
129 Notes to the Company
Financial Statements
134 Principal Subsidiary
Undertakings
135 Five Year Summary
136 Shareholder Information
122 — Consolidated Financial Statements
The awards outstanding at 31 December 2010 had a weighted average remaining contractual life of 14 months. The weighted average fair value
of conditional shares granted in the year was 123p.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares granted and calculated
using the valuation technique most appropriate to each type of award. These include Black-Scholes calculations and Monte Carlo simulations.
The inputs into the model were as follows:
Issued in Issued in
March 2010 March 2009
Weighted average share price at issue (pence) 173 73
Expected volatility 47.6% 43.0%
Expected life (months) 36 36
Risk-free rate 1.9% 1.8%
Expected dividend yield 4.8% 6.0%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the the period of time equivalent to the
remaining contractual life of the option. The expected life used in the model has been adjusted, based on management’s best estimate, for the
efects of non-transferability, exercise restrictions, and behavioural considerations.
(iii) Expense charged to income statement
The Group recognised total expenses of £2.0 million (2009: £2.7 million) related to equity-settled share-based payment transactions during
the year.
(iv) Cash-settled share-based payments
The Group issues to certain employees share appreciation rights (SARs) that require the Group to pay the intrinsic value of the SAR to the
employee at the date of exercise. The fair value of the SARs is determined by using the valuation technique most appropriate to each type of
award. These include the Black-Scholes calculations and Monte Carlo simulations and use the assumptions noted in the above table. The Group
has recorded liabilities of £0.3 million (2009: £0.2 million) and a total charge of £0.5 million (2009: £0.2 million). The total intrinsic value of vested
SARs at 31 December 2010 was £0.2 million (2009: £0.1m).
(v) Other share-based payment plan
The Company’s savings-related share option scheme is open to all eligible UK employees. Options are granted at a price equal to the average
three-day middle market price of a BBA Aviation ordinary share prior to the date of grant, less 20%. Options are granted under three or fve-year
SAYE contracts. The maximum overall employee contribution is £250 per month. Pursuant to this plan, the Group issued 78,043 ordinary shares in
2010 (2009: 3,297 ordinary shares).