Dish Network 2015 Annual Report Download - page 152

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-48
Stock-Based Compensation
During the year ended December 31, 2013, we incurred an initial charge related to vested options of $5 million of
additional non-cash, stock-based compensation expense in connection with the 2012 Stock Option Adjustment
discussed previously. These amounts are included in the table below. Total non-cash, stock-based compensation
expense for all of our employees is shown in the following table for the years ended December 31, 2015, 2014 and
2013 and was allocated to the same expense categories as the base compensation for such employees:
For the Years Ended December 31,
2015 2014 2013
(In thousands)
Subscriber-related $ 2,164 $ 1,859 $ 1,947
General and administrative 17,035 32,294 27,783
Non-cash, stock-based compensation from continuing operations 19,199 34,153 29,730
N
on-cash, stock-based compensation from discontinued operations — — 925
Total non-cash, stock-based compensation $ 19,199 $ 34,153 $ 30,655
As of December 31, 2015, our total unrecognized compensation cost related to our non-performance based unvested
stock awards was $14 million. This cost was based on an estimated future forfeiture rate of approximately 3.6% per
year and will be recognized over a weighted-average period of approximately two years. Share-based compensation
expense is recognized based on stock awards ultimately expected to vest and is reduced for estimated forfeitures.
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures
differ from those estimates. Changes in the estimated forfeiture rate can have a significant effect on share-based
compensation expense since the effect of adjusting the rate is recognized in the period the forfeiture estimate is
changed.
Valuation
The fair value of each stock option granted for the years ended December 31, 2015, 2014 and 2013 was estimated at
the date of the grant using a Black-Scholes option valuation model with the following assumptions:
For the Years Ended December 31,
Stock Options 2015 2014 2013
Risk-free interest rate 1.40 % - 2.19 % 1.80 % - 2.84 % 0.91 % - 2.66 %
Volatility factor 26.42 % - 36.22 % 28.53 % - 38.62 % 32.37 % - 39.87 %
Expected term of options in years 5.5 - 7.8 5.5 - 9.0 5.6 - 10.0
Weighted-average fair value of options granted $ 16.14 - $ 29.73 $ 19.08 - $ 29.20 $ 14.49 - $ 21.09
While we currently do not intend to declare dividends on our common stock, we may elect to do so from time to
time. Accordingly, the dividend yield percentage used in the Black-Scholes option valuation model was set at zero
for all periods. The Black-Scholes option valuation model was developed for use in estimating the fair value of
traded stock options which have no vesting restrictions and are fully transferable. Consequently, our estimate of fair
value may differ from other valuation models. Further, the Black-Scholes option valuation model requires the input
of highly subjective assumptions. Changes in these subjective input assumptions can materially affect the fair value
estimate.
We will continue to evaluate the assumptions used to derive the estimated fair value of our stock options as new
events or changes in circumstances become known.