Expedia 2013 Annual Report Download - page 110

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The aggregate intrinsic value of outstanding options shown in the stock option activity table above
represents the total pretax intrinsic value at December 31, 2013, based on our closing stock price of $69.66 as of
the last trading date in 2013. The total intrinsic value of stock options exercised was $117 million, $109 million,
and $30 million for the years ended December 31, 2013, 2012 and 2011.
During the three years ended December 31, 2013, 2012 and 2011, we awarded stock options as our primary
form of stock-based compensation. The fair value of stock options granted during the years ended December 31,
2013, 2012 and 2011 were estimated at the date of grant using the Black-Scholes option-pricing model, assuming
the following weighted average assumptions:
2013 2012 2011
Risk-free interest rate 0.71% 0.64% 1.87%
Expected volatility 44.81% 53.13% 49.94%
Expected life (in years) 4.07 4.00 4.68
Dividend yield 0.80% 1.04% 1.38%
Weighted-average estimated fair value of options granted
during the year $21.96 $13.96 $16.90
The 2011 weighted average fair value has been adjusted for the one-for-two reverse stock split in December
2011.
RSUs, which are stock awards that are granted to employees entitling the holder to shares of our common
stock as the award vests, were our primary form of stock-based award prior to 2009. Our RSUs generally vest
over three or four-years, but may accelerate in certain circumstances, including certain changes in control.
The following table presents a summary of RSU activity:
RSUs(1)
Weighted Average
Grant-Date Fair
Value(1)
(In thousands)
Balance as of January 1, 2011 2,317 $40.24
Granted 221 52.35
Vested and released (832) 39.32
Cancelled (137) 41.98
Adjustments due to the spin-off(2) 725
Vested and released — post spin-off (12) 13.45
Balance as of December 31, 2011(3) 2,282 21.47
Granted 602 32.07
Vested and released (1,382) 21.02
Cancelled (284) 22.82
Balance as of December 31, 2012 1,218 29.57
Granted 216 63.04
Vested and released (480) 23.29
Cancelled (522) 86.10
Balance as of December 31, 2013 432 50.64
(1) Reflects the one-for-two reverse stock split on December 20, 2011.
(2) Reflects the equitable adjustment to the number of unvested RSUs necessary to maintain the fair value of
those awards immediately prior to and following the spin-off.
(3) Outstanding RSUs as of December 31, 2011 represent RSUs outstanding after giving effect to one-for-two
reverse stock split and spin-off adjustments made in order to maintain the fair value of those awards
immediately prior to and immediately following the transaction.
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