Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2013

Summary of stock-based compensation

The following table summarizes our share-based compensation expense: 

	Year ended December 31,
	2013		2012		2011
	in millions
Liberty Global shares:
Performance-based incentive awards (a)	$	58.6	$	33.0	$	46.8
Other share-based incentive awards	182.9		46.0		43.4
Total Liberty Global shares (b)	241.5		79.0		90.2
Telenet share-based incentive awards (c)	56.5		31.2		40.0
Other	4.5		2.2		4.7
Total	$	302.5	$	112.4	$	134.9
Included in:
Continuing operations:
Operating expense	$	12.1	$	8.5	$	15.1
SG&A expense	288.6		101.6		114.3
Total - continuing operations	300.7		110.1		129.4
Discontinued operations (d)	1.8		2.3		5.5
Total	$	302.5	$	112.4	$	134.9

_______________

(a) Includes share-based compensation expense related to Liberty Global performance-based restricted share units (PSUs) for all periods presented, the Challenge Performance Awards (as defined and described below) for the applicable 2013 period and our five-year performance-based incentive plans for our senior executives and certain key employees (the Liberty Global Performance Plans) for 2011.

(b) In accordance with the terms of the Virgin Media Merger Agreement, we issued Liberty Global share-based incentive awards (Virgin Media Replacement Awards) to employees and former directors of Virgin Media in exchange for corresponding Virgin Media awards. In connection with the Virgin Media Acquisition, the Virgin Media Replacement Awards were remeasured as of June 7, 2013, resulting in an aggregate estimated fair value attributable to the post-acquisition period of $188.5 million. During the 2013 period following the Virgin Media Acquisition, Virgin Media recorded share-based compensation expense of $134.3 million, primarily related to the Virgin Media Replacement Awards, including $80.1 million that was charged to expense in recognition of the Virgin Media Replacement Awards that were fully vested on June 7, 2013 or for which vesting was accelerated pursuant to the terms of the Virgin Media Merger Agreement on or prior to December 31, 2013. The remaining June 7, 2013 estimated fair value will be amortized over the remaining service periods of the unvested Virgin Media Replacement Awards, subject to forfeitures and the satisfaction of performance conditions.

(c) During the second quarters of 2013, 2012 and 2011, Telenet modified the terms of certain of its share-based incentive plans to provide for anti-dilution adjustments in connection with its shareholder returns. In connection with these anti-dilution adjustments, Telenet recognized share-based compensation expense of $32.7 million, $12.6 million and $15.8 million, respectively, and continues to recognize additional share-based compensation expense as the underlying options vest. In addition, during the first quarter of 2013, Telenet recognized expense of $6.2 million related to the accelerated vesting of options granted under the Telenet 2010 SSOP (as defined and described below).

(d) Amounts relate to (i) the share-based compensation expense associated with the Liberty Global share-based incentive awards held by certain employees of the Chellomedia Disposal Group and (ii) during 2011, Austar’s long-term incentive plan.

Summary of stock compensation not recognized

The following table provides certain information related to share-based compensation not yet recognized for share incentive awards related to Liberty Global ordinary shares and Telenet ordinary shares as of December 31, 2013: 

	Liberty Global ordinary shares (a)		Liberty Global performance- based awards		Telenet ordinary shares (b)
Total compensation expense not yet recognized (in millions)	$	155.5	$	125.0	$	13.4
Weighted average period remaining for expense recognition (in years)	2.3		2.1		2.3

_______________

(a) Amounts relate to awards granted or assumed by Liberty Global under (i) the Liberty Global, Inc. 2005 Incentive Plan (as amended and restated effective June 7, 2013) (the Liberty Global Incentive Plan), (ii) the Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (as amended and restated effective June 7, 2013) (the Liberty Global Director Incentive Plan), (iii) the Virgin Media Inc. 2010 Stock Incentive Plan (as amended and restated effective June 7, 2013) (the VM Incentive Plan) and (iv) certain other incentive plans of Virgin Media pursuant to which awards may no longer be granted. The Liberty Global Incentive Plan, the Liberty Global Director Incentive Plan and the VM Incentive Plan are described below.

(b) Amounts relate to various equity incentive awards granted to employees of Telenet as described below.

Stock compensation assumptions

The following table summarizes certain information related to the incentive awards granted and exercised with respect to Liberty Global ordinary shares:

	Year ended December 31,
	2013		2012		2011
Assumptions used to estimate fair value of options, SARs and performance-based share appreciation rights (PSARs) granted:
Risk-free interest rate	0.36 - 2.03%		0.37 - 1.68%		0.82 - 3.31%
Expected life (a)	3.2 - 7.1 years		3.3 - 7.9 years		3.4 - 8.7 years
Expected volatility (a)	26.5 - 35.8%		28.0 - 40.4%		35.5 - 45.6%
Expected dividend yield	none		none		none
Weighted average grant-date fair value per share awards granted:
Options	$	27.39	$	20.00	$	21.41
SARs	$	16.71	$	14.36	$	15.02
PSARs	$	16.63	$	—	$	—
Restricted shares and RSUs	$	71.47	$	49.14	$	44.79
PSUs	$	69.88	$	50.18	$	39.98
Total intrinsic value of awards exercised (in millions):
Options	$	175.0	$	43.9	$	93.8
SARs	$	73.2	$	52.0	$	39.2
Cash received from exercise of options (in millions)	$	81.0	$	25.6	$	32.7
Income tax benefit related to share-based compensation (in millions)	$	48.0	$	16.1	$	18.9

_______________

(a) The 2013 ranges shown for these assumptions exclude the awards for certain former employees of Virgin Media who were expected to exercise their awards immediately or soon after the Virgin Media Acquisition. For these awards, the assumptions used for expected life and volatility were essentially nil.

Options [Member] | Class A Ordinary Shares [Member]

Stock options activity

The following tables summarize the share-based award activity during the year ended December 31, 2013 with respect to Liberty Global ordinary shares. In the following tables, the Virgin Media Replacement Awards represent the Liberty Global awards that were added as a result of the replacement of the outstanding Virgin Media stock incentive awards as of June 7, 2013 with share-based incentive awards of Liberty Global pursuant to the terms of the Virgin Media Merger Agreement.

Options — Class A ordinary shares	Number of shares		Weighted average exercise price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	804,617		$	25.90
Virgin Media Replacement Awards	3,934,574		$	31.16
Granted	62,314		$	73.66
Canceled	(144,436	)	$	52.75
Exercised	(1,948,624	)	$	27.47
Outstanding at December 31, 2013	2,708,445		$	32.08	6.1	$	154.2
Exercisable at December 31, 2013	1,555,700		$	26.23	4.6	$	97.7

Options [Member] | Class C Ordinary Shares [Member]

Stock options activity

Options — Class C ordinary shares	Number of shares		Weighted average exercise price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	842,771		$	24.59
Virgin Media Replacement Awards	2,935,250		$	27.16
Granted	67,334		$	68.16
Canceled	(107,797	)	$	48.74
Exercised	(1,576,096	)	$	24.06
Outstanding at December 31, 2013	2,161,462		$	28.62	6.1	$	120.4
Exercisable at December 31, 2013	1,270,181		$	22.85	4.6	$	78.1

SARs [Member] | Class A Ordinary Shares [Member]

Stock options activity

SARs — Class A ordinary shares	Number of shares		Weighted average base price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	3,761,337		$	36.94
Granted	1,234,736		$	74.38
Forfeited	(50,749	)	$	52.21
Exercised	(776,566	)	$	29.03
Outstanding at December 31, 2013	4,168,758		$	49.31	4.8	$	165.4
Exercisable at December 31, 2013	1,862,169		$	36.80	3.9	$	97.2

SARs [Member] | Class C Ordinary Shares [Member]

Stock options activity

SARs — Class C ordinary shares	Number of shares		Weighted average base price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	3,786,754		$	35.58
Granted	1,234,736		$	69.16
Forfeited	(50,749	)	$	49.70
Exercised	(836,355	)	$	27.47
Outstanding at December 31, 2013	4,134,386		$	47.07	4.8	$	154.0
Exercisable at December 31, 2013	1,827,797		$	35.74	3.9	$	88.8

PSARs [Member] | Class A Ordinary Shares [Member]

Stock options activity

PSARs — Class A ordinary shares	Number of shares		Weighted average base price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	—		$	—
Granted	2,903,750		$	69.77
Forfeited	(86,252	)	$	69.70
Outstanding at December 31, 2013	2,817,498		$	69.77	6.5	$	54.2
Exercisable at December 31, 2013	—		$	—	—	$	—

PSARs [Member] | Class C Ordinary Shares [Member]

Stock options activity

PSARs — Class C ordinary shares	Number of shares		Weighted average base price		Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	—		$	—
Granted	2,903,750		$	65.63
Forfeited	(86,252	)	$	65.56
Outstanding at December 31, 2013	2,817,498		$	65.63	6.5	$	52.6
Exercisable at December 31, 2013	—		$	—	—	$	—

Restricted shares and RSUs [Member] | Class A Ordinary Shares [Member]

Other-than-options activity

Restricted shares and RSUs — Class A ordinary shares	Number of shares		Weighted average grant-date fair value per share		Weighted average remaining contractual term
					in years
Outstanding at January 1, 2013	332,008		$	40.53
Virgin Media Replacement Awards (a)	900,408		$	76.24
Granted	128,958		$	74.05
Forfeited	(46,605	)	$	67.64
Released from restrictions	(589,093	)	$	64.65
Outstanding at December 31, 2013	725,676		$	69.47	5.9

Restricted shares and RSUs [Member] | Class C Ordinary Shares [Member]

Other-than-options activity

Restricted shares and RSUs — Class C ordinary shares	Number of shares		Weighted average grant-date fair value per share		Weighted average remaining contractual term
					in years
Outstanding at January 1, 2013	332,301		$	39.13
Virgin Media Replacement Awards (a)	671,923		$	71.51
Granted	128,958		$	68.89
Forfeited	(38,726	)	$	62.13
Released from restrictions	(485,060	)	$	58.64
Outstanding at December 31, 2013	609,396		$	64.14	5.4

______________

(a) The amounts shown as the grant-date fair values per share for these awards represent the June 7, 2013 market prices of the applicable LGI Series A or Series C common stock that were assigned to these awards when they were remeasured in connection with the Virgin Media Acquisition.

PSUs [Member] | Class A Ordinary Shares [Member]

Other-than-options activity

PSUs — Class A ordinary shares	Number of shares		Weighted average grant-date fair value per share		Weighted average remaining contractual term
					in years
Outstanding at January 1, 2013	759,585		$	46.54
Granted	580,459		$	71.97
Performance adjustment	(11,720	)	$	40.75
Forfeited	(75,273	)	$	69.70
Released from restrictions	(328,403	)	$	40.75
Outstanding at December 31, 2013	924,648		$	62.75	1.4

PSUs [Member] | Class C Ordinary Shares [Member]

Other-than-options activity

PSUs — Class C ordinary shares	Number of shares		Weighted average grant-date fair value per share		Weighted average remaining contractual term
					in years
Outstanding at January 1, 2013	759,585		$	44.68
Granted	549,047		$	67.69
Performance adjustment	(11,720	)	$	39.21
Forfeited	(58,607	)	$	65.56
Released from restrictions	(328,403	)	$	39.21
Outstanding at December 31, 2013	909,902		$	59.25	1.4

Telenet 2010 Specific Stock Option Plan [Member] | Telenet [Member]

Stock options activity

The following table summarizes the activity during 2013 related to the Telenet Specific Stock Option Plans:

Options — Telenet ordinary shares	Number of shares	Weighted average exercise  price			Weighted average remaining contractual term	Aggregate intrinsic  value
					in years	in millions
Outstanding at January 1, 2013	833,594	€	18.66
Granted (a)	456,490	€	26.43
Net impact of anti-dilution adjustments (b)	252,540	€	(3.58	)
Outstanding at December 31, 2013	1,542,624	€	17.91		3.8	€	39.3
Exercisable at December 31, 2013 (c)	—	€	—		—	€	—

_______________

(a) Represents the number of options for which the performance criteria was set during the period. The fair value of these options was calculated on the date that the performance criteria was set using an expected volatility ranging from 20.5% to 23.3%, an expected life ranging from 3.3 years to 4.1 years, and a risk-free return ranging from 0.33% to 1.07%. The grant date fair value of these options ranged from €7.91 ($10.91) to €18.24 ($25.15).

(b) Amount relates to options granted under the Telenet 2010 SSOP.

(c) All of the vested options pursuant to the Telenet 2010 SSOP become exercisable during defined exercise periods following January 1, 2014 and have an expiration date of September 4, 2017. Vested options pursuant to the Telenet 2013 SSOP become exercisable during defined exercise periods following July 4, 2016 and have an expiration date of July 4, 2018.

Employee Stock Options and Warrant Plans [Member] | Telenet [Member]

Stock options activity

The following table summarizes the activity during 2013 related to the Telenet Employee Stock Warrant Plans and the Telenet 2013 Employee Stock Option Plan:

Warrants / Options— Telenet ordinary shares	Number of shares		Weighted average exercise  price			Weighted average remaining contractual term	Aggregate intrinsic  value
						in years	in millions
Outstanding at January 1, 2013	3,185,709		€	13.95
Granted	799,448		€	34.51
Forfeited	(9,212	)	€	17.78
Exercised	(2,312,516	)	€	11.64
Net impact of anti-dilution adjustments	406,378		€	(2.86	)
Outstanding at December 31, 2013	2,069,807		€	21.71		3.6	€	44.8
Exercisable at December 31, 2013	958,071		€	14.39		1.6	€	27.8