Equity-Based Compensation

6 Months Ended

Jun. 30, 2011

Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]

Equity-Based Compensation

Equity-Based Compensation

The Company recognizes compensation costs for equity awards granted to its employees based on their grant-date fair value. Most of the Company's equity awards contain vesting conditions dependent upon the completion of specified service periods or achievement of established sets of performance criteria. Compensation cost for service-based equity awards is recognized ratably over the vesting period. Compensation cost for certain performance-based awards is adjusted to reflect the estimated probability of vesting. The Company has granted performance-based awards where the value of the award upon vesting will vary depending on the level of performance ultimately achieved. The Company recognizes compensation cost for these awards based on the level of performance expected to be achieved. The Company will recognize the impact of any change in estimate in the period of the change.

Generally, equity awards are forfeited by employees who terminate prior to vesting. However, certain employment contracts for certain named executive officers provide for the acceleration of vesting in the event of a change in control or specified termination events. In addition, the Company has granted equity awards of stock appreciation rights and restricted shares subject to market-based conditions. Compensation costs related to awards with a market-based condition will be recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. The Company currently satisfies exercises of stock options and stock appreciation rights, the vesting of restricted stock and the delivery of shares upon the vesting of restricted stock units with the issuance of new shares.

The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three- and six-month periods ended June 30, 2011 and 2010, respectively, was as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Total equity-based compensation	$	8,525		$	8,536		$	15,546		$	15,210
Tax impact(1)	(2,626		)	(2,399		)	(3,887		)	(4,974		)
Reduction in net income, net of tax	$	5,899		$	6,137		$	11,659		$	10,236

   ____________________

⁽¹⁾  Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item “Increase in income tax benefit payable to former stockholder” (see Note 8).

Stock-based compensation cost capitalized as a part of film costs was $4.4 million and $3.0 million for the three-month periods ended June 30, 2011 and 2010, respectively, and $8.6 million and $6.0 million for the six-month periods ended June 30, 2011 and 2010, respectively.

The following tables set forth the number and weighted average grant-date fair value of equity awards granted during the three- and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	Number Granted	Weighted Average Grant-Date Fair Value		Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)			(in thousands)
2011
Stock appreciation rights	270	$	10.30	305	$	10.34
Restricted stock and restricted stock units	245	$	26.52	290	$	26.80
2010
Stock appreciation rights	26	$	16.45	40	$	16.85
Restricted stock and restricted stock units	83	$	38.96	134	$	40.67

As of June 30, 2011, the total compensation cost related to unvested equity awards granted to employees (excluding equity awards with performance objectives not probable of achievement) but not yet recognized was approximately $77.9 million and will be amortized on a straight-line basis over a weighted average period of 1.7 years.