Equity-Based Compensation

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-Based Compensation

13. Equity-Based Compensation

Travelport Worldwide has two equity-based long-term incentive programs, the 2011 Equity Plan and 2013 Equity Plan under which restricted share units (“RSUs”) and stock options of Travelport Worldwide have been granted to the key employees of the Company. On January 1, 2014, all of the outstanding RSUs granted under the 2011 Equity Plan vested.

In May 2014, the Company communicated performance targets for the performance-based RSUs and stock options under the 2013 Equity Plan. Also in May 2014, the Company made a grant of time-based RSUs to certain employees. Consequently, 23.3 million of RSUs and 2 million of stock options were considered as granted for accounting purposes. The RSUs and stock options vest in April 2015 and April 2016, respectively, if the performance conditions are met and the participants remain in employment until then. Under the terms of the grant of the RSUs, vesting of a substantial portion of the time-based RSUs accelerates upon the completion of the proposed initial public offering by Travelport Worldwide or its wholly-owned subsidiary.

The activity of the Company’s RSUs and stock options for the six months ended June 30, 2014 is presented below:

	Shares					Restricted Share Units					Stock Options
(in millions, except per share, RSU or stock option fair value)	Number of Shares			Weighted Average Grant Date Fair Value		Number of RSUs			Weighted Average Grant Date Fair Value		Number of Options		Weighted Average Grant Date Fair Value
Balance as of January 1, 2014		6.4		$	0.74		41.8		$	0.39		2.0	$	0.12
Granted at fair market value		—			—		23.9		$	1.56		2.0	$	1.09
Vesting of restricted share units		8.5		$	0.44		(8.5	)	$	0.44		—		—
Forfeited/cancelled		—			—		(3.6	)	$	0.40		—		—
Net share settlement(1)		(3.7	)	$	0.45		—			—		—		—
Balance as of June 30, 2014		11.2		$	0.61		53.6		$	0.90		4.0	$	0.61

(1) The Company completed net share settlements for 3.7 million shares in Travelport Worldwide in connection with employee taxable income created upon issuance of shares. The Company agreed to pay these taxes on behalf of the employees in return for the employees returning an equivalent value of shares.

The fair values of employee options granted in June 2014 have been estimated as of the date of grant using the following weighted-average assumptions:

Expected term from grant date (in years)	3
Risk free interest rate	0.80	%
Expected volatility	60	%
Dividend yield	0	%

The weighted-average exercise price of options granted in June 2014 was $0.75 per option, with the remaining weighted average expected term as of June 30, 2014 of 3 years. None of the stock options have vested or have become exercisable as of June 30, 2014.

Compensation expense for the six months ended June 30, 2014 and 2013 resulted in a credit to equity on the Company’s consolidated condensed balance sheets of $9 million and $2 million, respectively, which was offset by a decrease of approximately $5 million and $0, respectively, due to net share settlements as the cash payment of the taxes was effectively a repurchase of previously granted equity awards. The Company expects the future equity-based compensation expense in relation to awards recognized for accounting purposes as being granted as of June 30, 2014 will be approximately $44 million based on the fair value of the RSUs and the stock options on the grant date.