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Share-based Compensation
6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-based Compensation
Share-based Compensation

Our share-based compensation expense primarily relates to the share-based incentive awards issued by Liberty Global to its employees and employees of its subsidiaries. A summary of the aggregate share-based compensation expense that is included in our operating and SG&A expenses is set forth below: 
 
Three months ended
June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
 
in millions
Liberty Global:
 
 
 
 
 
 
 
Performance-based incentive awards (a)
$
35.8

 
$
28.5

 
$
76.9

 
$
70.6

Other share-based incentive awards
33.1

 
25.1

 
58.5

 
50.5

Total Liberty Global
68.9

 
53.6

 
135.4

 
121.1

Telenet share-based incentive awards
3.6

 
2.4

 
4.6

 
5.6

Other
2.1

 
0.6

 
3.6

 
1.3

Total
$
74.6

 
$
56.6

 
$
143.6

 
$
128.0

Included in:
 
 
 
 
 
 
 
Operating expense:
 
 
 
 
 
 
 
Liberty Global Group
$
1.1

 
$
1.1

 
$
1.6

 
$
1.8

LiLAC Group
0.3

 
0.3

 
0.5

 
0.3

Total operating expense
1.4

 
1.4

 
2.1

 
2.1

SG&A expense:
 
 
 
 
 
 
 
Liberty Global Group
70.3

 
53.9

 
137.0

 
125.7

LiLAC Group
2.9

 
1.3

 
4.5

 
0.2

Total SG&A expense
73.2

 
55.2

 
141.5

 
125.9

Total
$
74.6

 
$
56.6

 
$
143.6

 
$
128.0

_______________

(a)
Includes share-based compensation expense related to (i) Liberty Global performance-based restricted share units (PSUs), including amounts resulting from the 2016 PSUs, as described and defined below, (ii) a challenge performance award plan for certain executive officers and key employees (the Challenge Performance Awards) and (iii) the May 2014 grant of performance grant units (PGUs) to our Chief Executive Officer. The Challenge Performance Awards include performance-based share appreciation rights (PSARs) and PSUs.

The following table provides certain information related to share-based compensation not yet recognized for share-based incentive awards related to Liberty Global ordinary shares as of June 30, 2016
 
Non-performance-based awards (a)
 
Performance-
based awards (a) (b)
 
 
 
 
Total compensation expense not yet recognized (in millions)
$
236.6

 
$
209.4

Weighted average period remaining for expense recognition (in years)
2.9

 
2.7

_______________

(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) PSUs, including $180.8 million related to the 2016 PSUs, and (ii) the PGUs.

The following table summarizes certain information related to the incentive awards granted and exercised with respect to Liberty Global ordinary shares:
 
Six months ended
 
June 30,
 
2016
 
2015
Assumptions used to estimate fair value of options and share appreciation rights (SARs) granted:
 
 
 
Risk-free interest rate
1.01 - 1.46%

0.96 - 1.89%
Expected life
3.2 - 5.5 years

3.0 - 5.5 years
Expected volatility
27.4 - 37.4%

23.1 - 30.1%
Expected dividend yield
none
 
none
Weighted average grant-date fair value per share of awards granted:
 
 
 
Options
$
10.31

 
$
14.73

SARs
$
8.67

 
$
10.78

Restricted share units (RSUs)
$
37.93

 
$
51.97

PSUs
$
34.09

 
$
51.69

Total intrinsic value of awards exercised (in millions):
 
 
 
Options
$
3.1

 
$
93.5

SARs
$
34.2

 
$
40.1

PSARs
$

 
$
0.2

Cash received from exercise of options (in millions)
$
14.4

 
$
37.0

Income tax benefit related to share-based compensation (in millions)
$
29.0

 
$
28.0



2016 PSUs

In February 2016, the compensation committee of our board of directors approved the grant of PSUs to executive officers and key employees (the 2016 PSUs) pursuant to a performance plan that is based on the achievement of a specified Adjusted OIBDA CAGR during the three-year period ended December 31, 2018. The 2016 PSUs require delivery of a compound annual growth rate of our consolidated operating cash flow (OCF CAGR) of 6.0% during the three-year performance period ending December 31, 2018, with over- and under-performance payout opportunities should the OCF CAGR exceed or fail to meet the target, as applicable. A performance range of 75% to 167.5% of the target OCF CAGR will generally result in award recipients earning 75% to 300% of their target 2016 PSUs, subject to reduction or forfeiture based on individual performance. The earned 2016 PSUs will vest 50% each on April 1, 2019 and October 1, 2019.


Share-based Award Activity Liberty Global Ordinary Shares

The following tables summarize the share-based award activity during 2016 with respect to awards issued by Liberty Global:

Liberty Global 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, 2016
 
873,333

 
$
22.85

 
 
 
 
Granted
 
79,899

 
$
36.06

 
 
 
 
Forfeited
 
(9,328
)
 
$
34.59

 
 
 
 
Exercised
 
(207,034
)
 
$
20.99

 
 
 
 
Outstanding at June 30, 2016
 
736,870

 
$
24.66

 
4.5
 
$
6.0

Exercisable at June 30, 2016
 
499,248

 
$
20.58

 
3.7
 
$
5.4

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, 2016
 
2,738,536

 
$
23.98

 
 
 
 
Granted
 
159,798

 
$
35.15

 
 
 
 
Forfeited
 
(51,787
)
 
$
35.07

 
 
 
 
Exercised
 
(541,147
)
 
$
19.40

 
 
 
 
Outstanding at June 30, 2016
 
2,305,400

 
$
25.58

 
5.3
 
$
16.4

Exercisable at June 30, 2016
 
1,304,011

 
$
19.05

 
3.5
 
$
14.6

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, 2016
 
7,693,152

 
$
34.89

 
 
 
 
Granted
 
2,641,914

 
$
37.73

 
 
 
 
Forfeited
 
(123,302
)
 
$
43.48

 
 
 
 
Exercised
 
(336,732
)
 
$
11.64

 
 
 
 
Outstanding at June 30, 2016
 
9,875,032

 
$
36.34

 
4.9
 
$
18.2

Exercisable at June 30, 2016
 
4,136,581

 
$
30.20

 
3.4
 
$
18.2










Liberty Global Shares continued:
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, 2016
 
18,685,347

 
$
31.70

 
 
 
 
Granted
 
5,283,828

 
$
36.60

 
 
 
 
Forfeited
 
(256,622
)
 
$
41.60

 
 
 
 
Exercised
 
(995,103
)
 
$
11.66

 
 
 
 
Outstanding at June 30, 2016
 
22,717,450

 
$
33.61

 
4.6
 
$
55.6

Exercisable at June 30, 2016
 
10,937,013

 
$
27.51

 
3.2
 
$
55.5

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, 2016
 
2,889,457

 
$
31.93

 
 
 
 
Forfeited
 
(657
)
 
$
31.87

 
 
 
 
Outstanding at June 30, 2016
 
2,888,800

 
$
31.93

 
4.0
 
$

Exercisable at June 30, 2016
 
2,888,800

 
$
31.93

 
4.0
 
$

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, 2016
 
8,629,481

 
$
30.52

 
 
 
 
Forfeited
 
(1,961
)
 
$
30.46

 
 
 
 
Outstanding at June 30, 2016
 
8,627,520

 
$
30.52

 
4.0
 
$

Exercisable at June 30, 2016
 
8,672,520

 
$
30.52

 
4.0
 
$







Liberty Global Shares continued:
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, 2016
 
564,976

 
$
44.06

 
 
Granted
 
268,427

 
$
37.72

 
 
Forfeited
 
(23,233
)
 
$
46.22

 
 
Released from restrictions
 
(101,374
)
 
$
41.30

 
 
Outstanding at June 30, 2016
 
708,796

 
$
41.98

 
3.4
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, 2016
 
1,194,182

 
$
41.64

 
 
Granted
 
536,854

 
$
36.59

 
 
Forfeited
 
(50,385
)
 
$
44.29

 
 
Released from restrictions
 
(236,244
)
 
$
38.06

 
 
Outstanding at June 30, 2016
 
1,444,407

 
$
40.26

 
3.3
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, 2016
 
1,690,200

 
$
42.61

 
 
Granted
 
2,075,660

 
$
34.70

 
 
Performance adjustment (a)
 
17,499

 
$
39.33

 
 
Forfeited
 
(16,719
)
 
$
45.12

 
 
Released from restrictions
 
(696,341
)
 
$
39.51

 
 
Outstanding at June 30, 2016
 
3,070,299

 
$
37.93

 
2.5
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, 2016
 
666,667

 
$
42.43

 
 
Released from restriction
 
(333,333
)
 
$
42.43

 
 
Outstanding at June 30, 2016
 
333,334

 
$
42.43

 
0.7


Liberty Global Shares continued:
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, 2016
 
2,158,351

 
$
41.30

 
 
Granted
 
4,151,320

 
$
33.63

 
 
Performance adjustment (a)
 
35,000

 
$
38.08

 
 
Forfeited
 
(33,508
)
 
$
43.47

 
 
Released from restrictions
 
(837,276
)
 
$
35.58

 
 
Outstanding at June 30, 2016
 
5,473,887

 
$
36.32

 
2.7
_______________

(a)
Represents the increase in PSUs associated with the first quarter 2016 determination that 103.6% of the PSUs that were granted in 2014 (the 2014 PSUs) had been earned. Half of the earned 2014 PSUs were released from restrictions on April 1, 2016 and, subject to forfeitures, the remainder will be released on October 1, 2016.

LiLAC 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, 2016
 
21,233

 
$
24.29

 
 
 
 
Granted
 
3,995

 
$
37.16

 
 
 
 
Forfeited
 
(238
)
 
$
43.84

 
 
 
 
Exercised
 
(1,312
)
 
$
9.56

 
 
 
 
Outstanding at June 30, 2016
 
23,678

 
$
27.08

 
4.1
 
$
0.2

Exercisable at June 30, 2016
 
16,388

 
$
21.45

 
3.2
 
$
0.2

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, 2016
 
57,742

 
$
22.42

 
 
 
 
Granted
 
7,990

 
$
38.67

 
 
 
 
Forfeited
 
(474
)
 
$
43.91

 
 
 
 
Exercised
 
(4,439
)
 
$
9.86

 
 
 
 
Outstanding at June 30, 2016
 
60,819

 
$
25.30

 
3.8
 
$
0.6

Exercisable at June 30, 2016
 
46,224

 
$
20.43

 
3.1
 
$
0.6


LiLAC Shares continued:
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, 2016
 
233,192

 
$
31.07

 
 
 
 
Granted
 
71,990

 
$
37.53

 
 
 
 
Forfeited
 
(1,963
)
 
$
39.57

 
 
 
 
Exercised
 
(6,852
)
 
$
7.84

 
 
 
 
Outstanding at June 30, 2016
 
296,367

 
$
33.12

 
4.7
 
$
1.0

Exercisable at June 30, 2016
 
140,195

 
$
26.72

 
3.2
 
$
1.0

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, 2016
 
579,273

 
$
29.73

 
 
 
 
Granted
 
143,980

 
$
40.61

 
 
 
 
Forfeited
 
(4,173
)
 
$
39.81

 
 
 
 
Exercised
 
(19,413
)
 
$
8.01

 
 
 
 
Outstanding at June 30, 2016
 
699,667

 
$
32.51

 
4.4
 
$
3.1

Exercisable at June 30, 2016
 
377,302

 
$
25.79

 
3.0
 
$
3.1

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, 2016
 
140,127

 
$
30.08

 
 
 
 
Forfeited
 
(33
)
 
$
30.02

 
 
 
 
Outstanding at June 30, 2016
 
140,094

 
$
30.08

 
4.0
 
$
0.3

Exercisable at June 30, 2016
 
140,094

 
$
30.08

 
4.0
 
$
0.3








LiLAC Shares continued:
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, 2016
 
418,492

 
$
30.30

 
 
 
 
Forfeited
 
(99
)
 
$
30.23

 
 
 
 
Outstanding at June 30, 2016
 
418,393

 
$
30.30

 
4.0
 
$

Exercisable at June 30, 2016
 
418,393

 
$
30.30

 
4.0
 
$

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, 2016
 
1,713

 
$
45.12

 
 
Granted (a)
 
52,349

 
$
40.79

 
 
Released from restrictions
 
(301
)
 
$
48.09

 
 
Outstanding at June 30, 2016
 
53,761

 
$
40.89

 
1.8
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, 2016
 
3,428

 
$
43.97

 
 
Granted (a)
 
128,186

 
$
42.79

 
 
Released from restrictions
 
(606
)
 
$
44.03

 
 
Outstanding at June 30, 2016
 
131,008

 
$
42.82

 
1.8
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, 2016
 
86,303

 
$
42.56

 
 
Granted
 
72,848

 
$
35.46

 
 
Performance adjustment (b)
 
870

 
$
39.33

 
 
Forfeited
 
(755
)
 
$
46.11

 
 
Released from restrictions
 
(34,413
)
 
$
39.57

 
 
Outstanding at June 30, 2016
 
124,853

 
$
39.20

 
2.2






LiLAC Shares continued:
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, 2016
 
33,333

 
$
42.43

 
 
Released from restriction
 
(16,666
)
 
$
42.43

 
 
Outstanding at June 30, 2016
 
16,667

 
$
42.43

 
0.7
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, 2016
 
111,215

 
$
41.36

 
 
Granted
 
145,696

 
$
37.70

 
 
Performance adjustment (b)
 
1,741

 
$
38.08

 
 
Forfeited
 
(1,518
)
 
$
44.44

 
 
Released from restrictions
 
(40,692
)
 
$
35.69

 
 
Outstanding at June 30, 2016
 
216,442

 
$
39.91

 
2.5
_______________

(a)
Includes 52,306 of LiLAC Class A and 128,100 of LiLAC Class C share-based incentive awards granted to CWC employees following the CWC Acquisition. These awards include 8,370 LiLAC Class A and 20,506 LiLAC Class C awards that will vest on June 1, 2017 and 43,936 LiLAC Class A and 107,594 LiLAC Class C awards that will vest on June 1, 2018. The weighted average grant-date fair values for the LiLAC Class A and LiLAC Class C awards granted to CWC employees were $40.79 and $42.79, respectively.

(b)
Represents the increase in PSUs associated with the first quarter 2016 determination that 103.6% of the 2014 PSUs had been earned. Half of the earned 2014 PSUs were released from restrictions on April 1, 2016, and, subject to forfeitures, the remainder will be released on October 1, 2016.