Time Warner Cable 2007 Annual Report Download - page 114

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The following table summarizes information about Time Warner stock options held by TWC employees that
were outstanding as of December 31, 2007:
Number
of Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
(in thousands) (in years) (in thousands)
Outstanding as of December 31, 2006 . . . . . . . . . . . . . . . . 58,082 $ 26.38
Transferred
(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713 28.04
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,560) 14.04
Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,202) 27.60
Outstanding as of December 31, 2007 . . . . . . . . . . . . . . . . 53,033 27.19 5.00 $ 37,181
Exercisable as of December 31, 2007 . . . . . . . . . . . . . . . . . 42,047 29.71 4.34 $ 37,154
(a)
Transferred amounts represent outstanding Time Warner stock options held by employees of Time Warner who transferred to TWC
during the year, net of Time Warner stock options held by employees of TWC who transferred to Time Warner during the year.
As of December 31, 2007, the number, weighted-average exercise price, aggregate intrinsic value and
weighted-average remaining contractual term of Time Warner stock options vested and expected to vest
approximate amounts for options outstanding. Total unrecognized compensation cost related to unvested Time
Warner stock options as of December 31, 2007, without taking into account expected forfeitures, is $21 million and
is expected to be recognized over a weighted-average period of one year.
The weighted-average fair value of a Time Warner stock option granted to TWC employees during the year
was $4.47 ($2.68, net of tax) in 2006 and $5.11 ($3.07, net of tax) in 2005. The total intrinsic value of Time Warner
stock options exercised during the year was $24 million in 2007, $16 million in 2006 and $7 million in 2005. The tax
benefits realized from Time Warner stock options exercised during the year were $10 million in 2007, $6 million in
2006 and $3 million in 2005.
Upon exercise of Time Warner stock options, TWC is obligated to reimburse Time Warner for the excess of the
market price of the stock on the day of exercise over the option price. TWC records a stock option distribution
liability and a corresponding adjustment to shareholders’ equity with respect to unexercised Time Warner stock
options. This liability will increase or decrease depending on the market price of Time Warner common stock and
the number of Time Warner stock options held by TWC employees. This liability was $36 million and $137 million
as of December 31, 2007 and 2006, respectively, and is included in long-term payables to affiliated parties in the
consolidated balance sheet. TWC reimbursed Time Warner $24 million in 2007, $16 million in 2006 and $7 million
in 2005 in connection with the exercise of Time Warner stock options.
Time Warner Restricted Stock and Restricted Stock Units
The following table summarizes information about unvested Time Warner restricted stock and RSU awards
held by TWC employees as of December 31, 2007:
Number of
Shares/Units
Weighted-
Average
Grant Date
Fair Value
(in thousands)
Unvested as of December 31, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 $ 16.42
Transferred
(a)
........................................................ 2 18.67
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134) 12.29
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) 17.40
Unvested as of December 31, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 17.49
(a)
Transferred amounts represent unvested Time Warner restricted stock and RSU awards held by employees of Time Warner who
transferred to TWC during the year, net of Time Warner restricted stock and RSU awards held by TWC employees who transferred to
Time Warner during the year.
109
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)