Share-based Compensation

Our share-based compensation expense is based on the share-based incentive awards held by our and our subsidiaries’ employees, including share-based incentive awards related to Liberty Global shares and the shares of certain of our subsidiaries. The following table summarizes our share-based compensation expense:



	Three months ended March 31,
	2014		2013
	in millions
Liberty Global shares:
Performance-based incentive awards (a)	$	20.6	$	4.1
Other share-based incentive awards	30.2		11.2
Total Liberty Global shares (b)	50.8		15.3
Telenet share-based incentive awards (c)	2.9		11.0
Other	1.4		0.5
Total	$	55.1	$	26.8
Included in:
Continuing operations:
Operating expense	$	1.3	$	3.9
SG&A expense	53.8		22.4
Total - continuing operations	55.1		26.3
Discontinued operation	—		0.5
Total	$	55.1	$	26.8

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(a)	Includes share-based compensation expense related to Liberty Global performance-based restricted share units (PSUs) and, for the 2014 period, the challenge performance award plan (the Challenge Performance Awards).


(b)	In connection with the Virgin Media Acquisition, 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. During the 2014 period, Virgin Media recorded share-based compensation expense of $19.3 million, primarily related to the Virgin Media Replacement Awards.


(c)	The amount for the 2013 period includes $6.4 million related to the accelerated vesting of options granted under the Telenet 2010 specific stock option plan (Telenet 2010 SSOP).

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 March 31, 2014:



	Liberty Global ordinary shares (a)		Liberty Global performance-based awards (b)		Telenet ordinary shares (c)

Total compensation expense not yet recognized (in millions)	$	110.5	$	141.3	$	8.7
Weighted average period remaining for expense recognition (in years)	2.2		2.0		2.5

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(a)

Amounts relate to awards granted or assumed by Liberty Global under (i) the Liberty Global 2014 Incentive Plan, (ii) the Liberty Global, Inc. 2005 Incentive Plan (as amended and restated effective June 7, 2013) (the Liberty Global Incentive Plan), (iii) the Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (as amended and restated effective June 7, 2013) (the Liberty Global Director Incentive Plan), (iv) the Virgin Media Inc. 2010 Stock Incentive Plan (as amended and restated effective June 7, 2013) (the VM Incentive Plan) and (v) certain other incentive plans of Virgin Media pursuant to which awards may no longer be granted. On January 30, 2014, our shareholders approved the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan and, accordingly, no further awards will be granted under the Liberty Global Incentive Plan, the Liberty Global Director Incentive Plan or the VM Incentive Plan.


(b)	Amounts relate to (i) the Challenge Performance Awards, which include performance-based share appreciation rights (PSARs) and restricted share units (RSUs) that were granted in June 2013, and (ii) PSUs.


(c)	Amounts relate to various equity incentive awards granted to employees of Telenet.

The following table summarizes certain information related to the incentive awards granted and exercised with respect to Liberty Global ordinary shares. Assumptions used to estimate the fair value of options, share appreciation rights (SARs) and PSARs are not provided as grants of such awards were not significant during the three months ended March 31, 2014 and 2013.



	Three months ended
	March 31,
	2014		2013

Weighted average grant-date fair value per PSU granted	$	41.02	(a)
Total intrinsic value of awards exercised (in millions):
Options	$	26.0	$	5.7
SARs	$	9.4	$	15.0
Cash received from exercise of options (in millions)	$	14.0	$	1.2
Income tax benefit related to share-based compensation (in millions)	$	10.4	$	3.0

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(a)	Not applicable as there were no PSUs granted during the three months ended March 31, 2013.

Share-Based Award Activity - Liberty Global Ordinary Shares

The following tables summarize the share-based award activity during the three months ended March 31, 2014 with respect to Liberty Global ordinary shares:



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, 2014	924,648		$	32.05
Granted	272,464		$	41.61
Performance adjustment (a)	(138,668	)	$	26.17
Forfeited	(12,844	)	$	30.96
Released from restrictions	(137,126	)	$	26.21
Outstanding at March 31, 2014	908,474		$	36.71	1.7



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, 2014	2,744,452		$	29.99
Granted	546,016		$	40.72
Performance adjustment (a)	(416,004	)	$	24.73
Forfeited	(38,532	)	$	29.03
Released from restrictions	(411,378	)	$	24.76
Outstanding at March 31, 2014	2,424,554		$	34.21	1.7

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(a)	Represents the reduction in PSUs associated with the first quarter 2014 determination that 66.3% of the PSUs that were granted in 2012 (the 2012 PSUs) had been earned. Half of the earned 2012 PSUs were released from restrictions on March 31, 2014 and, subject to forfeitures, the remainder will be released from restrictions on September 30, 2014.

In May 2014, the compensation committee of our board of directors authorized the grant of share incentive awards with respect to approximately 3.6 million, 1.0 million and 5.2 million Liberty Global Class A, B and C shares, respectively. The authorized awards include SARs, PSUs, RSUs and options.