Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

v2.4.0.8
Stock Based Compensation
 9 Months Ended
Sep. 30, 2014
Stock Based Compensation  
Stock Based Compensation

(2) Stock-Based Compensation

Liberty Incentive Plans

In connection with the Trip Spin-Off in August 2014, all outstanding restricted shares, stock options and stock appreciation rights (collectively, “Awards”) with respect to Liberty Ventures common stock (“Liberty Ventures Award”) were adjusted pursuant to the anti-dilution provisions of the incentive plans under which the equity awards were granted, such that a holder of a Liberty Ventures Award received:

i.

An adjustment to the exercise price or base price, as applicable, and the number of shares subject to the Liberty Ventures Award (as so adjusted, an “adjusted Liberty Ventures Award”) and

ii.

A corresponding equity award relating to shares of TripCo common stock (a “TripCo Award”)

The exercise prices and number of shares subject to the adjusted Liberty Ventures Award and the TripCo Award were determined based on 1) the exercise prices and number of shares subject to the Liberty Ventures Award, 2) the pre-distribution trading price of Liberty Ventures common stock and 3) the post-distribution trading prices of Liberty Ventures common stock and TripCo common stock, such that all of the pre-distribution intrinsic value of the Liberty Ventures Award was allocated between the adjusted Liberty Ventures Award and the TripCo Award.

Following the Trip Spin-Off, employees of Liberty hold Awards in both Liberty Ventures common stock and TripCo common stock.  The compensation expense relating to employees of Liberty is recorded at Liberty. Therefore, compensation expense related to options resulting from the Trip Spin-Off will not be recognized in the Company’s consolidated financial statements.

Liberty TripAdvisor Holdings-Outstanding Awards

The following table presents the number and weighted average exercise price (“WAEP”) of the Awards to purchase TripCo common stock granted to certain officers, employees and directors of Liberty.

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted

    

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

 

remaining

 

Aggregate

 

 

 

 

 

 

 

 

contractual

 

intrinsic

 

 

 

Series A

 

WAEP

 

life

 

value

 

 

 

(in thousands)

 

 

 

 

(in years)

 

(in millions)

 

Outstanding at January 1, 2014

 

 —

 

$

 —

 

 

 

 

 

 

Granted

 

 —

 

$

 —

 

 

 

 

 

 

Exercised

 
(1)

 

$
9.39 

 

 

 

 

 

 

Forfeited/Cancelled

 

 —

 

$

 —

 

 

 

 

 

 

Trip Spin-Off adjustment

 
1,846 

 

$
13.90 

 

 

 

 

 

 

Outstanding at September 30, 2014

 
1,845 

 

$
13.90 

 
4.5 

 

$
37 

 

Exercisable at September 30, 2014

 
1,034 

 

$
13.58 

 
4.2 

 

$
21 

 

 

There were 44 thousand shares of Series B options issued as part of the Trip Spin-Off with a WAEP of $11.21. There was no other activity during the period related to the Series B options.

Included in the accompanying condensed consolidated statements of operations are the following amounts of stock‑based compensation, the majority of which relates to TripAdvisor as discussed below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Nine months

 

 

 

ended September 30,

 

ended September 30,

 

 

    

2014

    

2013

    

2014

    

2013

 

 

 

amounts in millions

 

Operating expense

 

$
8 

 
7 

 

 
22 

 
20 

 

Selling, general and administrative expense

 

 
12 

 
7 

 

 
32 

 
24 

 

 

 

$
20 

 
14 

 

 
54 

 
44 

 

 

TripAdvisor Equity Grant Awards

The following table presents the number and weighted average exercise price (“WAEP”) of the Awards to purchase TripAdvisor common stock granted to certain officers, employees and directors of TripAdvisor.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted

    

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

TripAdvisor

 

 

 

 

remaining

 

Aggregate

 

 

 

stock

 

 

 

 

contractual

 

intrinsic

 

 

 

options

 

WAEP

 

life

 

value

 

 

 

(in thousands)

 

 

 

 

(in years)

 

(in millions)

 

Outstanding at January 1, 2014

 
9,470 

 

$
40.18 

 

 

 

 

 

 

Assumed options from acquisition

 
101 

 

$
16.36 

 

 

 

 

 

 

Granted

 
557 

 

$
96.42 

 

 

 

 

 

 

Exercised

 
(1,139)

 

$
33.67 

 

 

 

 

 

 

Cancelled or expired

 
(234)

 

$
45.05 

 

 

 

 

 

 

Outstanding at September 30, 2014

 
8,755 

 

$
44.21 

 
5.3 

 

$
416 

 

Exercisable at September 30, 2014

 
3,845 

 

$
31.68 

 
2.9 

 

$
230 

 

Vested or expected to vest after September 30, 2014

 
8,203 

 

$
43.38 

 
5.1 

 

$
396 

 

 

As of September 30, 2014, the total unrecognized compensation cost related to unvested TripAdvisor stock options was approximately $93 million and will be recognized over a weighted average period of approximately 2.8 years. The total intrinsic value of stock options exercised for the nine months ended September 30, 2014 and 2013 was $71 million and $45 million, respectively.

Additionally, during the nine months ended September 30, 2014, TripAdvisor granted 618 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. The weighted average grant date fair value for RSU’s granted during the nine months ended September 30, 2014 was $96.15 per share. As of September 30, 2014, the total unrecognized compensation cost related to TripAdvisor RSUs was approximately $57 million and will be recognized over a weighted average period of approximately 3 years.