Time Warner Cable 2010 Annual Report Download - page 109

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TWC Stock Options
The table below presents the assumptions used to value TWC stock options at their grant date for the years ended
December 31, 2010, 2009 and 2008 and reflects the weighted average of all awards granted within each year:
2010 2009 2008
Year Ended December 31,
Expected volatility ..................................... 31.4% 34.3% 30.0%
Expected term to exercise from grant date (in years) ............ 6.73 6.04 6.51
Risk-free rate ......................................... 3.1% 2.6% 3.2%
Expected dividend yield ................................. 3.5% 0.0% 0.0%
The following table summarizes information about TWC stock options that were outstanding as of December 31,
2010:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
(in thousands) (in years) (in millions)
Outstanding as of December 31, 2009 ............... 11,520 $ 32.45
Granted ..................................... 3,803 45.18
Exercised .................................... (3,553) 34.38
Forfeited or expired ............................ (285) 34.24
Outstanding as of December 31, 2010 ............... 11,485 36.03 7.92 $ 345
Exercisable as of December 31, 2010 ............... 1,984 38.27 6.23 55
Expected to vest as of December 31, 2010 ........... 9,213 35.50 8.26 281
The number and weighted-average grant date fair value of TWC stock options granted during the year was
3,803,000 at $10.95 per option in 2010, 6,345,000 at $9.69 per option in 2009 and 3,804,000 at $13.22 per option in 2008.
Of the total TWC stock options granted in 2009, 5,140,000 were granted at a weighted-average grant date fair value of
$9.46 per option and 1,205,000 were granted as Separation-related “make-up” equity awards at a weighted-average grant
date fair value of $10.64 per option.
The total intrinsic value of TWC stock options exercised during the year ended December 31, 2010 and 2009 was
$69 million and $1 million, respectively. Cash received from TWC stock options exercised during the year ended
December 31, 2010 and 2009 was $122 million and $4 million, respectively, and tax benefits realized from these exercises
of TWC stock options was $28 million and $1 million, respectively. No TWC stock options were exercised during the year
ended December 31, 2008. Total unrecognized compensation cost related to unvested TWC stock options as of
December 31, 2010, without taking into account expected forfeitures, is $53 million and is expected to be
recognized over a weighted-average period of 2.41 years.
During February 2011, TWC granted options to purchase approximately 2.2 million shares of TWC Common Stock
under the 2006 Plan.
97
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)