Expedia 2011 Annual Report Download - page 101

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During the three years ended December 31, 2011, we awarded stock options as our primary form of stock-
based compensation. The fair value of stock options granted during the years ended December 31, 2011, 2010
and 2009 were estimated at the date of grant using the Black-Scholes option-pricing model, assuming the
following weighted average assumptions:
2011 2010 2009
Risk-free interest rate 1.87% 2.18% 1.75%
Expected volatility 49.94% 51.75% 49.96%
Expected life (in years) 4.68 4.72 4.72
Dividend yield 1.38% 1.25% —
Weighted-average estimated fair value of options granted
during the year $16.90 $18.56 $ 6.62
The 2011, 2010 and 2009 weighted average fair value has been adjusted for the one-for-two reverse stock
split in December 2011.
Our expected dividend rate was zero prior to our first dividend declaration on February 10, 2010 as we did
not historically pay cash dividends on our common stock and did not anticipate doing so for the foreseeable
future. For stock options granted after February 10, 2010, including our annual employee grants, we used an
annualized dividend yield based on the first quarterly per share dividend declared by our Executive Committee,
acting on behalf of the Board of Directors.
The following table presents a summary of our stock options outstanding and exercisable at December 31,
2011:
Options Outstanding
Options Exercisable
Range of Exercise Prices Shares
Weighted-
Average
Price Per
Share
Remaining
Contractual
Life Shares
Weighted-
Average Exercise
Price
(In thousands) (In years) (In thousands)
$ 0.01 - $ 5.00 52 $ 4.30 1.2 52 $ 4.30
5.01 - 10.00 3,974 7.27 4.2 763 7.09
10.01 - 15.00 208 13.77 2.9 105 13.55
15.01 - 20.00 4,461 18.62 6.2 17 17.13
20.01 - 25.00 3,484 21.30 5.1 516 21.43
25.01 - 30.00 1,898 26.60 4.4 1,266 26.89
30.01 - 37.00 721 36.15 3.4 721 36.15
0.01 - 37.00 14,798 17.96 5.0 3,440 22.82
RSUs, which are stock awards that are granted to employees entitling the holder to shares of our common
stock as the award vests, were our primary form of stock-based award prior to 2009. Awards that settle in cash
and the resulting liability are insignificant. Our RSUs generally vest over five years, but may accelerate in certain
circumstances, including certain changes in control.
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