|6 Months Ended|
Jun. 30, 2014
|Share-based Compensation [Abstract]|
The Company has granted to certain of its directors, employees and employees of its subsidiaries stock appreciation rights ("SARs"), restricted stock grants and options to purchase shares of Liberty common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock grants) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award (such as stock appreciation rights that will be settled in cash) based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.
Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation, a portion of which relates to TripAdvisor as discussed below:
During the six months ended June 30, 2014, Liberty granted, primarily to QVC employees, 1.8 million options to purchase shares of Series A Liberty Interactive common stock. Such options had a weighted average grant-date fair value of $12.06 per share and vest semi-annually over the 4 year vesting period.
The Company has calculated the grant-date fair value for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Liberty's stock and the implied volatility of publicly traded Liberty options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.
The following tables present the number and weighted average exercise price ("WAEP") of the Awards to purchase Liberty Interactive and Liberty Ventures common stock granted to certain officers, employees and directors of the Company.
There was no activity during the period for the outstanding Series B awards.
As of June 30, 2014, the total unrecognized compensation cost related to unvested Liberty outstanding equity Awards was approximately $127 million, including compensation associated with the option exchange that occurred in December 2012. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 2.2 years.
TripAdvisor - Stock-based Compensation
TripAdvisor has outstanding options and restricted stock which are exercisable into their common stock. During the six months ended June 30, 2014, TripAdvisor issued approximately 491 thousand of primarily service based stock options under their 2011 Incentive Plan with a weighted average exercise price per option of $96.45 and a weighted average estimated grant-date fair value per option of $47.25. Approximately 834 thousand equity awards were exercised during the period at a weighted average exercise price of $33.46. As of June 30, 2014, TripAdvisor has 8.9 million options outstanding of which 4.0 million are exercisable with weighted average exercise prices of $43.79 and $31.79, respectively. The aggregate intrinsic value of these outstanding and exercisable options was $578 million and $306 million, respectively. TripAdvisor stock-based compensation was approximately $17 million and $13 million for the three months ended June 30, 2014 and 2013, respectively, and was approximately $34 million and $30 million, for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, the total unrecognized compensation cost related to unvested TripAdvisor stock options was approximately $99 million and will be recognized over a weighted average period of approximately 3.0 years.
Additionally, during the six months ended June 30, 2014, TripAdvisor granted approximately 513 thousand service based RSUs under their 2011 Incentive Plan for which the fair value was measured based on the quoted price of TripAdvisor common stock at the date of grant. As of June 30, 2014, the total unrecognized compensation cost related to 1.3 million unvested TripAdvisor RSUs was approximately $57 million and will be recognized over a weighted average period of approximately 3.2 years.
Certain of the Company's other subsidiaries have stock based compensation plans under which employees and non-employees are granted options or similar stock based awards. Awards made under these plans vest and become exercisable over various terms. The awards and compensation recorded, if any, under these plans is not significant to Liberty.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef