Time Warner Cable 2008 Annual Report Download - page 134

Download and view the complete annual report

Please find page 134 of the 2008 Time Warner Cable annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

such awards immediately after the Special Dividend. The modifications to the outstanding equity awards will be
made pursuant to existing antidilution provisions in TWC’s equity plans and related award agreements.
Other information pertaining to each category of TWC equity-based compensation appears below.
TWC Stock Options
The assumptions presented in the table below represent the weighted-average value of the applicable
assumption used to value TWC stock options at their grant date for the years ended December 31, 2008 and 2007.
2008 2007
Year Ended December 31,
Expected volatility ................................................. 30.0% 24.1%
Expected term to exercise from grant date ................................ 6.51 years 6.58 years
Risk-free rate ..................................................... 3.2% 4.7%
Expected dividend yield ............................................. 0.0% 0.0%
The following table summarizes information about TWC stock options that were outstanding as of
December 31, 2008:
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, 2007 ........... 2,810 $ 36.98
Granted ................................. 4,922 27.46
Forfeited or expired ........................ (351) 33.12
Outstanding as of December 31, 2008 ........... 7,381 30.81 8.81 $ 99
Exercisable as of December 31, 2008 ........... 710 36.80 7.74 $ —
As of December 31, 2008, the number, weighted-average exercise price, aggregate intrinsic value and
weighted-average remaining contractual term of TWC stock options vested and expected to vest approximate
amounts for options outstanding. As of December 31, 2008, 79 million shares were available for future grants of
TWC stock options. Total unrecognized compensation cost related to unvested TWC stock options as of
December 31, 2008, without taking into account expected forfeitures, is $43 million and is expected to be
recognized over a weighted-average period of three years.
The weighted-average fair value of a TWC stock option granted during the year was $10.21 ($6.13, net of tax)
in 2008 and $13.30 ($7.98, net of tax) in 2007. No TWC stock options were exercised during the years ended
December 31, 2008 and 2007.
During February 2009, TWC issued approximately 6.3 million options to employees under the 2006 Plan at a
grant date fair value ranging from $7.06 to $7.22 per option.
124
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)