Time Warner Cable 2010 Annual Report Download - page 111

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reduction in value of Time Warner Equity Awards held by TWC employees as a result of the Separation. Refer to
“Separation-related Equity Awards” above for further details.
Equity-based Compensation Expense
Equity-based compensation expense and the related tax benefit recognized for the years ended December 31, 2010,
2009 and 2008 was as follows (in millions):
2010 2009 2008
Year Ended December 31,
Equity-based compensation expense recognized:
Stock options ............................................ $ 45 $ 45 $ 36
Restricted stock units ...................................... 64 52 42
Total equity-based compensation expense
(a)
..................... $ 109 $ 97 $ 78
Tax benefit recognized
(a)
................................... $ 43 $ 38 $ 31
(a)
Equity-based compensation expense and the related tax benefit recognized in 2008 include $10 million and $4 million, respectively, for Time
Warner Equity Awards. No additional compensation expense will be recognized under Time Warner equity plans after March 12, 2009, the date of
TWC’s separation from Time Warner. However, TWC will continue to reimburse Time Warner for the intrinsic value of Time Warner stock
options held by TWC employees upon exercise until all such awards have been exercised or have expired. Refer to “Equity Award
Reimbursement Obligation” in Note 11 for further details.
15. EMPLOYEE BENEFIT PLANS
Pension Plans
TWC sponsors qualified noncontributory defined benefit pension plans covering a majority of its employees (the
“qualified pension plans”). TWC also provides a nonqualified noncontributory defined benefit pension plan for certain
employees (the “nonqualified pension plan” and, together with the qualified pension plans, the “pension plans”). Pension
benefits are based on formulas that reflect the employees’ years of service and compensation during their employment
period. TWC uses a December 31 measurement date for its pension plans.
Changes in the Company’s projected benefit obligation, fair value of plan assets and funded status from January 1
through December 31 are presented below (in millions):
2010 2009
Projected benefit obligation at beginning of year ............................. $ 1,552 $ 1,318
Service cost ...................................................... 115 100
Interest cost ...................................................... 100 88
Actuarial loss ..................................................... 62 83
Benefits paid ...................................................... (26) (28)
Settlements ....................................................... — (9)
Projected benefit obligation at end of year .................................. $ 1,803 $ 1,552
Accumulated benefit obligation at end of year ............................... $ 1,477 $ 1,228
Fair value of plan assets at beginning of year................................ $ 1,595 $ 1,113
Actual return on plan assets ........................................... 209 349
Employer contributions .............................................. 104 170
Benefits paid ...................................................... (26) (28)
Settlements ....................................................... — (9)
Fair value of plan assets at end of year .................................... $ 1,882 $ 1,595
Funded status ....................................................... $ 79 $ 43
99
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)