鶹app

Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.8.0.1
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2017
Stock-Based Compensation
Stock-Based Compensation

(4)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,

2017

2016

2017

2016

(amountsinmillions)

Cost of subscriber services:

Programming and content

$

7

6

21

14

Customer service and billing

1

1

3

3

Other

2

1

4

3

Other operating expense

4

3

11

9

Selling, general and administrative

71

30

143

80

$

85

41

182

109

During the nine months ended September 30, 2017, and in connection with our CEO’s employment agreement, 鶹app granted approximately 920 thousand, 149 thousand and 171 thousand options to purchase shares of Series C common stock of 鶹app SiriusXM, 鶹app Braves and 鶹app Formula One, respectively, and 50 thousand RSUs of Series C 鶹app Formula One common stock, of which 29 thousand RSUs were performance-based. Such options had a weighted average GDFV of $8.50, $6.02 and $8.96 per share, respectively, and the RSUs had a GDFV of $33.92 per share. These options mainly vest on December 31, 2017, the time-based RSUs vested immediately upon grant, and 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.

Also during the nine months ended September 30, 2017, 鶹app granted 2.0 million options to Formula 1 employees to purchase shares of Series C 鶹app Formula One common stock.Such options had a weighted average GDFV of $8.16 per share and vest monthly over one year.

Additionally, 鶹app granted to 鶹app employees 148 thousand, 19 thousand and 77 thousand options to purchase shares of Series C common stock of 鶹app SiriusXM, 鶹app Braves and 鶹app Formula One, respectively, during the nine months endedSeptember 30, 2017. Such options had a weighted average GDFV of $9.64, $6.11 and $9.25 per share, respectively, and mainly vest semi-annually over four years.

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, 2017.

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, 2017

2,018

$

19.39

11,008

$

25.91

Granted

—

$

—

1,068

$

37.12

Exercised

(380)

$

17.77

(753)

$

17.80

Forfeited/Cancelled

—

$

—

(51)

$

32.61

Outstanding at September 30, 2017

1,638

$

19.76

2.2

years

$

36

11,272

$

27.48

4.3

years

$

162

Exercisable at September 30, 2017

1,626

$

19.70

2.2

years

$

36

4,968

$

23.63

3.3

years

$

91

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, 2017

189

$

11.30

1,073

$

14.92

Granted

—

$

—

168

$

23.45

Exercised

(10)

$

8.83

(21)

$

9.05

Forfeited/Cancelled

—

$

—

(5)

$

18.88

Outstanding at September 30, 2017

179

$

11.43

2.2

years

$

2

1,215

$

16.18

4.3

years

$

11

Exercisable at September 30, 2017

178

$

11.41

2.2

years

$

2

545

$

13.73

3.3

years

$

6

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, 2017

455

$

11.55

2,611

$

15.18

Granted

—

$

—

2,263

$

33.98

Exercised

(55)

$

10.55

(173)

$

11.08

Forfeited/Cancelled

—

$

—

(12)

$

19.07

Outstanding at September 30, 2017

400

$

11.69

2.2

years

$

10

4,689

$

24.39

5.2

years

$

64

Exercisable at September 30, 2017

397

$

11.66

2.2

years

$

10

1,694

$

20.50

4.4

years

$

30

As of September 30, 2017, the total unrecognized compensation cost related to unvested Awards was approximately $36 million.Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.4years.

As of September 30, 2017, 鶹app reserved 12.9 million, 1.4 million and 5.1 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 endedSeptember 30, 2017. As of September 30, 2017, SIRIUS XM has approximately 290 million options outstanding of which approximately 128 million are exercisable, each with a WAEP per share of $3.75 and $3.16, respectively. The aggregate intrinsic value of SIRIUS XM options outstanding and exercisable as of September 30, 2017 is $514 million and $302 million, respectively. In addition, as of September 30, 2017, SIRIUS XM has granted approximately 32 million nonvested RSUs with a GDFV per share of $4.55. The stock-based compensation expense related to SIRIUS XM was $35 million and $30 million for the three months endedSeptember 30, 2017 and 2016, respectively, and $94 million and $78 million for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, the total unrecognized compensation cost related to unvested SIRIUS XM stock options and RSUs was $281 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 2.5years.

Other

Braves Holdings has a long term incentive plan under which employees are granted equity-based awards.Awards made under this plan vest over various terms and are typically cash settled and recorded as liability awards.The obligation (typically Level 3) related to this plan is included in Accounts payable and accrued liabilities in the Company’s condensed consolidated balance sheets.