Time Warner Cable 2010 Annual Report Download - page 110

Download and view the complete annual report

Please find page 110 of the 2010 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 152

  • 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

TWC Restricted Stock Units
The following table summarizes information about unvested TWC RSUs for the year ended December 31, 2010:
Number of
Units
Weighted-
Average
Grant Date
Fair Value
(in thousands)
Unvested as of December 31, 2009 ....................................... 4,009 $ 58.55
Granted ........................................................... 1,941 45.19
Vested ............................................................ (481) 79.95
Forfeited .......................................................... (156) 55.09
Unvested as of December 31, 2010 ....................................... 5,313 51.82
The number and weighted-average grant date fair value of TWC RSUs granted during the year was 1,941,000 at $45.19 per
RSU in 2010, 2,645,000 at $38.80 per RSU in 2009 and 993,000 at $82.35 per RSU in 2008. Of the total TWC RSUs granted in
2009, 1,285,000 were granted at a weighted-average grant date fair value of $53.01 per RSU, 1,305,000 were granted as Special
Dividend retained distributions at a weighted-average grant date fair value of $24.99 per RSU and 55,000 were granted as
Separation-related “make-up” equity awards at a weighted-average grant date fair value of $33.80 per RSU.
As of December 31, 2010, the intrinsic value of unvested TWC RSUs was $351 million. Total unrecognized
compensation cost related to unvested TWC RSUs as of December 31, 2010, without taking into account expected
forfeitures, is $107 million and is expected to be recognized over a weighted-average period of 2.49 years. The fair value
of TWC RSUs that vested during the year was $49 million in 2010, $6 million in 2009 and $4 million in 2008.
During February 2011, TWC granted approximately 1.4 million RSUs under the 2006 Plan.
Time Warner Equity Plans
Prior to 2007, Time Warner granted options to purchase Time Warner common stock and shares of Time Warner
common stock (“restricted stock”) or RSUs under its equity plans (collectively, the “Time Warner Equity Awards”) to
employees of TWC. Time Warner did not grant Time Warner Equity Awards to employees of TWC after TWC Common
Stock began to trade publicly in March 2007. In addition, employees of Time Warner who became employed by
TWC prior to the Separation retained their Time Warner Equity Awards pursuant to their terms and TWC recorded equity-
based compensation expense from the date of transfer through the end of the applicable vesting period.
In connection with the Spin-Off Dividend and the 1-for-3 reverse stock split implemented by Time Warner on
March 27, 2009 (the “Time Warner Reverse Stock Split”), and as provided for in Time Warner’s equity plans, the number
of outstanding Time Warner Equity Awards and the exercise prices of stock options were adjusted to maintain the fair
value of those awards. In addition, in connection with Time Warner’s distribution to its shareholders of all of the shares of
AOL Inc. stock that it owned on December 9, 2009, the number of outstanding Time Warner Equity Awards and the
exercise prices of stock options were further adjusted to maintain the fair value of those awards. These adjustments were
made pursuant to existing antidilution provisions in Time Warner’s equity plans and, therefore, did not result in the
recognition of incremental compensation expense for the Company.
Under the terms of Time Warner’s equity plans and related award agreements, as a result of the Separation,
TWC employees who held Time Warner Equity Awards were treated as if their employment with Time Warner had been
terminated without cause at the time of the Separation. This treatment resulted in the forfeiture of unvested stock options
and shortened exercise periods for vested stock options and pro rata vesting of the next installment of (and forfeiture of the
remainder of) the RSUs for those TWC employees who did not satisfy retirement-treatment eligibility provisions in the
Time Warner equity plans and related award agreements. During the second quarter of 2009, TWC granted the
Separation-related “make-up” equity awards or cash payment awards to TWC employees to offset the forfeiture and
98
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)