Qurate Retail, Inc. Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Awards (Tables)

9 Months Ended

Sep. 30, 2017

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016
Selling and marketing	$	1,777	$	1,369		$	4,941	$	4,880
General and administrative (a)	2,249		2,870			2,693		9,818
Stock-based compensation expense before income taxes	4,026		4,239			7,634		14,698
Income tax expense (benefit) (b)	1,308		(1,493		)	163		(5,134		)
Stock-based compensation expense after income taxes	$	5,334	$	2,746		$	7,797	$	9,564
(a) In the nine months ended September 30, 2017, HSNi reversed approximately $4.5 million of expense related to the forfeiture of unvested awards as a result of HSNi's former Chief Executive Officer's resignation in the second quarter of 2017.
(b) In the three months ended September 30, 2017, HSNi wrote-off approximately $3.1 million of deferred tax assets associated with equity awards that expired unexercised.

A summary of the stock-based awards granted during the nine months ended September 30, 2017 is as follows:



	Nine Months Ended September 30, 2017
	Number of Awards Granted	Weighted Average per Share Fair Value
Maximum value stock appreciation rights (a)	1,144,049	$6.36
Restricted stock units	359,097	$37.41
Performance share units (b)	96,439	$57.36
Employee stock purchase plan options	54,159	$8.10
Dividend equivalents due to quarterly dividend	22,309	-
(a) Maximum value SARs are similar to traditional SARs, except these instruments contain a predetermined cap of 200% on the maximum earnings potential a recipient can expect to receive upon exercise.
(b) Performance share units ("PSUs") have vesting percentages that between 0% and 200% of the target award based on HSNi's Total Shareholder Return relative to a peer group at the end of the three-year performance period. The compensation expense for these PSUs is based on the fair value of the awards measured at the grant date and is expensed ratably over the vesting term. PSUs are reflected at the target number of awards granted.

The weighted average assumptions used in the valuation of each for the nine months ended September 30, 2017 are as follows:



	Nine Months Ended September 30, 2017
	Maximum Value Stock Appreciation Rights		Employee Stock Purchase Plan Options		Performance Share Units
Volatility factor	27.4	%	35.0	%	30.0	%
Risk-free interest rate	1.79	%	0.85	%	1.40	%
Expected term	4.7		0.5		2.9
Dividend yield	3.6	%	4.2	%	0.0	%