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Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AOL Restricted Stock Units
The following table summarizes information about unvested AOL RSUs at December 31, 2011:
Number of
RSUs
(in millions)
Weighted-
Average Grant
Date Fair Value
Unvested at December 31, 2008 —
Converted(a) 0.3 $ 23.29
Granted 2.9 $ 23.28
Unvested at December 31, 2009 3.2 $ 23.29
Vested (0.4) $ 23.38
Granted 1.2 $ 23.92
Forfeited (0.7) $ 23.45
Unvested at December 31, 2010 3.3 $ 23.54
Vested (1.2) $ 23.49
Granted 1.8 $ 19.81
Forfeited (1.1) $ 22.74
Unvested at December 31, 2011 2.8 $ 21.47
(a) Represents the Time Warner RSUs held by AOL's Chairman and Chief Executive Officer that were converted into AOL RSUs. The weighted-average
grant date fair value amount above for these converted awards represents the fair value on the conversion date.
At December 31, 2011, the intrinsic value of unvested AOL RSUs was $41.6 million. As of December 31, 2011, there was $46.6 million of
unrecognized compensation cost related to outstanding RSUs expected to vest. The Company expects to recognize this amount over a weighted-average
period of 2.7 years. To the extent the actual forfeiture rate is different from what the Company has estimated, equity-based compensation expense related to
these awards will be different from the Company's expectations. Total fair value of shares vested during the year ended December 31, 2011 was $27.4 million.
Time Warner Stock Options
The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value Time Warner stock
options at their grant date.
Year Ended
December 31,
2009
Expected volatility 38.1%
Expected term to exercise from grant date 4.71 years
Risk-free rate 1.9%
Expected dividend yield 3.8%
The grant date fair value of all Time Warner equity-based awards has been adjusted to reflect the effect of Time Warner's 1-for-3 reverse stock split
which became effective on March 27, 2009. The weighted-average fair value of a Time Warner stock option granted to AOL employees was $4.57 for the
year ended December 31, 2009. The total intrinsic value of Time Warner options exercised by AOL employees was $3.3 million for the year ended
December 31, 2009. Time Warner received cash from the exercise of Time Warner stock options by
92