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 Old Liberty Global Ordinary Shares and the shares of certain of our subsidiaries. The amounts and disclosures presented below have not been adjusted for the July 1, 2015 LiLAC Transaction.

The following table summarizes our share-based compensation expense:



	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
	in millions
Old Liberty Global Ordinary Shares:
Performance-based incentive awards (a)	$	28.5	$	23.2	$	70.6	$	43.8
Other share-based incentive awards	25.1		22.2		50.5		52.4
Total Old Liberty Global Ordinary Shares	53.6		45.4		121.1		96.2
Telenet share-based incentive awards	2.4		7.8		5.6		10.7
Other	0.6		1.2		1.3		2.6
Total	$	56.6	$	54.4	$	128.0	$	109.5
Included in:
Operating expense:
Liberty Global Group	$	1.1	$	3.2	$	1.8	$	4.0
LiLAC Group	0.3		0.4		0.3		0.9
Total operating expense	1.4		3.6		2.1		4.9
SG&A expense:
Liberty Global Group	53.9		49.3		125.7		101.4
LiLAC Group (b)	1.3		1.5		0.2		3.2
Total SG&A expense	55.2		50.8		125.9		104.6
Total	$	56.6	$	54.4	$	128.0	$	109.5

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(a)	Includes share-based compensation expense related to (i) Liberty Global performance-based restricted share units (PSUs), (ii) a challenge performance award plan for certain executive officers and key employees (the Challenge Performance Awards) and (iii) the Performance Grant Units (PGUs). The Challenge Performance Awards include performance-based share appreciation rights (PSARs) and PSUs.


(b)	The amount for the six-month period in 2015 includes the reversal of $1.8 million of share-based compensation expense, primarily related to forfeitures of unvested PSUs during the first quarter of 2015.

The following table provides certain information related to share-based compensation not yet recognized for share-based incentive awards related to Old Liberty Global Ordinary Shares as of June 30, 2015:



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

Total compensation expense not yet recognized (in millions)	$	212.0	$	148.7
Weighted average period remaining for expense recognition (in years)	3.1		1.3

_______________

(a)

Amounts relate to awards granted or assumed by Liberty Global under (i) the Liberty Global 2014 Incentive Plan (as amended and restated effective February 24, 2015), (ii) the Liberty Global 2014 Nonemployee Director Incentive Plan, (iii) the Liberty Global, Inc. 2005 Incentive Plan (as amended and restated effective June 7, 2013), (iv) the Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (as amended and restated effective June 7, 2013) and (v) certain other incentive plans of Virgin Media, including Virgin Media’s 2010 stock incentive plan. All new awards are granted under the Liberty Global 2014 Incentive Plan or the Liberty Global 2014 Nonemployee Director Incentive Plan.


(b)	Amounts relate to (i) the Challenge Performance Awards, (ii) PSUs and (iii) the PGUs.

The following table summarizes certain information related to the incentive awards granted and exercised with respect to Old Liberty Global Ordinary Shares:



	Six months ended
	June 30,
	2015		2014
Assumptions used to estimate fair value of options, share appreciation rights (SARs) and PSARs granted:
Risk-free interest rate	0.96 - 1.89%		0.81 - 1.77%
Expected life	3.0 - 5.5 years		3.1 - 5.1 years
Expected volatility	23.1 - 30.1%		25.5 - 28.7%
Expected dividend yield	none		none
Weighted average grant-date fair value per share of awards granted:
Options	$	14.73	$	11.40
SARs	$	10.78	$	8.95
PSARs	$	—	$	8.15
Restricted share units (RSUs)	$	51.97	$	39.72
PSUs	$	51.69	$	40.41
PGUs	$	—	$	44.04
Total intrinsic value of awards exercised (in millions):
Options	$	93.5	$	43.7
SARs	$	40.1	$	17.7
PSARs	$	0.2	$	0.2
Cash received from exercise of options (in millions)	$	37.0	$	23.9
Income tax benefit related to share-based compensation (in millions)	$	28.0	$	20.1

Share-based Award Activity - Old Liberty Global Ordinary Shares

The following tables summarize the share-based award activity during the six months ended June 30, 2015 with respect to Old Liberty Global Ordinary Shares ordinary shares:



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, 2015	1,726,259		$	18.01
Granted	61,763		$	54.97
Cancelled	(13,836	)	$	23.59
Exercised	(920,468	)	$	14.03
Outstanding at June 30, 2015	853,718		$	24.90	5.6	$	25.0
Exercisable at June 30, 2015	417,692		$	18.05	4.3	$	15.0



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, 2015	3,946,192		$	17.67
Granted	622,301		$	43.34
Cancelled	(34,493	)	$	22.23
Exercised	(1,613,927	)	$	14.99
Outstanding at June 30, 2015	2,920,073		$	24.57	6.1	$	76.3
Exercisable at June 30, 2015	1,377,436		$	15.25	4.1	$	48.7



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, 2015	5,607,988		$	31.07
Granted	2,252,602		$	53.11
Forfeited	(106,696	)	$	37.27
Exercised	(354,800	)	$	25.68
Outstanding at June 30, 2015	7,399,094		$	37.95	5.1	$	119.3
Exercisable at June 30, 2015	2,815,909		$	25.41	3.4	$	80.7



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, 2015	14,689,045		$	28.49
Granted	4,505,204		$	51.41
Forfeited	(262,502	)	$	34.80
Exercised	(1,062,945	)	$	23.48
Outstanding at June 30, 2015	17,868,802		$	34.47	4.8	$	292.2
Exercisable at June 30, 2015	7,907,213		$	23.75	3.3	$	212.5



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, 2015	2,788,749		$	35.10
Forfeited	(35,625	)	$	35.03
Exercised	(4,166	)	$	35.03
Outstanding at June 30, 2015	2,748,958		$	35.10	5.0	$	52.1
Exercisable at June 30, 2015	7,708		$	35.03	1.6	$	0.1



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, 2015	8,366,248		$	33.48
Forfeited	(106,875	)	$	33.41
Exercised	(12,499	)	$	33.41
Outstanding at June 30, 2015	8,246,874		$	33.48	5.0	$	141.4
Exercisable at June 30, 2015	23,124		$	33.41	1.6	$	0.4



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, 2015	565,270		$	38.27
Granted	298,713		$	53.11
Forfeited	(18,827	)	$	37.52
Released from restrictions	(299,372	)	$	37.65
Outstanding at June 30, 2015	545,784		$	46.76	3.3



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, 2015	1,387,003		$	35.59
Granted	597,426		$	51.40
Forfeited	(45,611	)	$	34.70
Released from restrictions	(553,929	)	$	34.55
Outstanding at June 30, 2015	1,384,889		$	42.85	3.7



PSUs and PGUs — 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, 2015	1,989,693		$	41.34
Granted	410,716		$	52.82
Performance adjustment (a)	50,410		$	37.31
Forfeited	(22,619	)	$	38.47
Released from restrictions	(543,707	)	$	41.12
Outstanding at June 30, 2015	1,884,493		$	43.84	1.5



PGUs — Class B ordinary shares	Number of shares		Weighted average grant-date fair value per share		Weighted average remaining contractual term
					in years
Outstanding at January 1, 2015	1,000,000		$	44.55
Released from restrictions	(333,333	)	$	44.55
Outstanding at June 30, 2015	666,667		$	44.55	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, 2015	2,442,767		$	36.71
Granted	821,432		$	51.12
Performance adjustment (a)	147,179		$	34.80
Forfeited	(58,997	)	$	36.02
Released from restrictions	(614,341	)	$	34.80
Outstanding at June 30, 2015	2,738,040		$	41.38	1.3

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(a)	Represents the increase in PSUs associated with the first quarter 2015 determination that 113.6% of the PSUs that were granted in 2013 (the 2013 PSUs) had been earned. Half of the earned 2013 PSUs were released from restrictions on March 31, 2015 and, subject to forfeitures, the remainder will be released on September 30, 2015.