鶹app

Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.10.0.1
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2018
Stock-Based Compensation
Stock-Based Compensation

(5)Stock-Based Compensation

鶹app grants, to certain of its directors, employees and employees of its subsidiaries, restricted stock, restricted stock units (“RSUs”) and stock options to purchase shares of its 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) based on the grant-date fair value (“GDFV”) 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 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, as discussed below:

Three months ended

Nine months ended

September 30,

September 30,

2018

2017

2018

2017

(amountsinmillions)

Cost of subscriber services:

Programming and content

$

3

7

21

21

Customer service and billing

1

1

3

3

Other

1

2

4

4

Other operating expense

5

4

13

11

Selling, general and administrative

36

71

104

143

$

46

85

145

182

鶹app—Grants of stock options

Awards granted during the nine months ended September 30, 2018 are summarized as follows:

Nine Months Ended

September 30, 2018

Options

Weighted

granted

average

(000's)

GDFV

SeriesC 鶹app SiriusXM common stock, 鶹app CEO (1)

633

$

11.56

SeriesC 鶹app Braves common stock, 鶹app CEO (1)

46

$

6.44

SeriesC 鶹app Formula One common stock, 鶹app CEO (1)

138

$

8.80

SeriesC 鶹app Formula One common stock, Formula 1 employees (2)

1,888

$

8.64

(1)

Grants cliff vest on December 31, 2018. Grants were made in connection with the CEO’s employment agreement.

(2)

Grants vest monthly over one year.

In addition to the stock option grants to the 鶹app CEO and in connection with his employment agreement, 鶹app granted performance-based RSUs. During the nine months ended September 30, 2018, 鶹app granted 12 thousand and 86 thousand performance-based RSUs of Series C 鶹app Braves common stock and Series C 鶹app Formula One common stock, respectively. Such RSUs had a GDFV of $23.34 per share and $31.99 per share, respectively, at the time they were granted. The performance-based RSUs cliff vest in one year, subject to satisfaction of certain performance objectives. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. As the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The value of the grant is remeasured at each reporting period.

The Company did not grant anyoptions to purchase SeriesA or SeriesB of 鶹app SiriusXM, 鶹app Braves or 鶹app Formula One common stock during the nine months endedSeptember 30, 2018.

鶹app calculates the GDFV for all of its equity classified awards and the subsequent remeasurement of its liability classified and certain performance-based awards using the Black-Scholes Model. 鶹app 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 鶹app common stock and the implied volatility of publicly traded 鶹app options. 鶹app uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject Awards.

鶹app—Outstanding Awards

The following tables present the number and weighted average exercise price ("WAEP") of Awards to purchase 鶹app common stock granted to certain officers, employees and directors of the Company and certain Awards of employees of Lions Gate Entertainment Corp. (formerly employees of Starz).

鶹app SiriusXM

SeriesA

SeriesC

Weighted

Aggregate

Weighted

Aggregate

average

intrinsic

average

intrinsic

鶹app

remaining

value

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2018

1,626

$

19.78

11,328

$

27.66

Granted

—

$

—

633

$

42.50

Exercised

(214)

$

19.69

(470)

$

20.01

Forfeited/Cancelled

—

$

—

(1)

$

39.09

Outstanding at September 30, 2018

1,412

$

19.80

1.2

years

$

33

11,490

$

28.79

3.6

years

$

168

Exercisable at September 30, 2018

1,409

$

19.77

1.2

years

$

33

5,699

$

26.55

3.0

years

$

96

鶹app Braves

SeriesA

SeriesC

Weighted

Aggregate

Weighted

Aggregate

average

intrinsic

average

intrinsic

鶹app

remaining

value

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2018

179

$

11.43

1,231

$

16.27

Granted

—

$

—

46

$

23.34

Exercised

(1)

$

13.69

(4)

$

13.37

Forfeited/Cancelled

—

$

—

—

$

—

Outstanding at September 30, 2018

178

$

11.42

1.2

years

$

3

1,273

$

16.53

3.5

years

$

14

Exercisable at September 30, 2018

178

$

11.41

1.2

years

$

3

708

$

15.83

3.0

years

$

8

鶹app Formula One

SeriesA

SeriesC

Weighted

Aggregate

Weighted

Aggregate

average

intrinsic

average

intrinsic

鶹app

remaining

value

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2018

400

$

11.69

4,760

$

24.59

Granted

—

$

—

2,026

$

31.56

Exercised

(38)

$

11.68

(118)

$

14.04

Forfeited/Cancelled

—

$

—

(1)

$

34.78

Outstanding at September 30, 2018

362

$

11.69

1.2

years

$

9

6,667

$

26.89

5.0

years

$

69

Exercisable at September 30, 2018

362

$

11.68

1.2

years

$

9

3,857

$

28.09

4.8

years

$

35

As of September 30, 2018, the total unrecognized compensation cost related to unvested Awards was approximately $31 million. Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 1.9years.

As of September 30, 2018, 鶹app reserved 12.9 million, 1.5 million and 7 million shares of Series A and Series C common stock of 鶹app SiriusXM, 鶹app Braves and 鶹app Formula One, respectively, for issuance under exercise privileges of outstanding stock Awards.

SIRIUS XM — Stock-based Compensation

SIRIUS XM granted various types of stock awards to its employees and members of its board of directors during the nine months ended September 30, 2018. As of September 30, 2018, SIRIUS XM has approximately 244 million options outstanding of which approximately 136 million are exercisable, each with a WAEP per share of $4.19 and $3.56, respectively. The aggregate intrinsic value of SIRIUS XM options outstanding and exercisable as of September 30, 2018 is $532 million and $376 million, respectively. In addition, during the nine months ended September 30, 2018, SIRIUS XM granted approximately 15 million nonvested RSUs with a GDFV per share of $6.56. The stock-based compensation expense related to SIRIUS XM was $30 million and $35 million for the three months endedSeptember 30, 2018 and 2017, respectively, and $100 million and $94 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, the total unrecognized compensation cost related to unvested SIRIUS XM stock options and RSUs was $275 million. The SIRIUS XM unrecognized compensation cost will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 1.8years.