Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options and Other Share-Based Payments |
Stock Options and Other Share-Based Payments
Certain QVC employees and officers have received stock options (the "Options") and restricted shares in Series A Qurate Retail common stock ( “QRTEA”) and Qurate Retail's former Series A Liberty Ventures common stock ("LVNTA") in accordance with the Qurate Retail, Inc. 2000 Incentive Plan, as amended from time to time; the Qurate Retail, Inc. 2007 Incentive Plan, as amended from time to time; the Qurate Retail, Inc. 2010 Incentive Plan, as amended from time to time; the Qurate Retail, Inc. 2012 Incentive Plan, as amended from time to time; and the Qurate Retail, Inc. 2016 Omnibus Incentive Plan, as amended from time to time (collectively, the "Liberty Incentive Plan").
(a) Stock options
A summary of the activity of the Liberty Incentive Plan with respect to the QRTEA Options granted to QVC employees and officers as of and during the year ended December 31, 2019 is presented below:
N/A - Not applicable as the QRTEA share price as of December 31, 2019 is less than that of the lowest exercise price.
Upon employee exercise of the Options, the exercise price is remitted to Qurate Retail in exchange for the shares. The aggregate intrinsic value of all Options exercised during the years ended December 31, 2019, 2018 and 2017 was $2 million, $20 million and $32 million, respectively.
The weighted average fair value at date of grant of a QRTEA Option granted during the years ended December 31, 2019, 2018 and 2017 was $4.08, $8.52 and $7.86, respectively.
During the years ended December 31, 2019, 2018 and 2017, the fair value of each QRTEA Option was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
Expected volatility is based on historical and implied volatilities of QRTEA common stock over a period commensurate with the expected term of the options. The Company estimates the expected term of the Options based on historical exercise and forfeiture data. The volatility used in the calculation for the Options is based on the historical volatility of Qurate Retail's stocks and the implied volatility of publicly traded Qurate Retail Options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject Options.
The fair value of the Options is recognized as expense over the requisite service period.
During the years ended December 31, 2019, 2018 and 2017, the Company recorded $22 million, $28 million and $29 million, respectively, of stock-based compensation expense related to the Options. As of December 31, 2019, the total unrecognized compensation cost related to unvested Options was approximately $28 million. Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.0 years.
(b) Restricted stock plan
A summary of the activity of the Liberty Incentive Plan with respect to the QRTEA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2019 is presented below:
During the years ended December 31, 2019, 2018 and 2017, the Company recorded $17 million, $18 million and $10 million, respectively, of stock-based compensation expense related to these shares. As of December 31, 2019, the total unrecognized compensation cost related to unvested restricted shares of common stock was approximately $31 million. Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.6 years.
Fair value of restricted shares is calculated based on the market price on the day of the granted shares. The weighted average grant date fair value of the QRTEA restricted shares granted to QVC employees and officers during the years ended December 31, 2019, 2018 and 2017 was $16.83, $26.23, and $22.49, respectively. There have been no LVNTA restricted shares granted to QVC employees and officers during the years ended December 31, 2019, 2018 and 2017.
The aggregate fair value of all restricted shares of common stock that vested during the years ended December 31, 2019, 2018 and 2017 was $16 million, $37 million and $10 million, respectively.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||