(4)   Stock-Based Compensation

Liberty grants, to certain of its directors, employees and employees of its subsidiaries, restricted stock units (“RSUs”) and stock options to purchase shares of its common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and RSUs) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Stock-based compensation expense, included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations, was $6 million and $7 million for the three months ended September 30, 2026 and 2025, respectively, and $17 million and $15 million for the nine months ended September 30, 2026 and 2025, respectively.

Grants of Awards

Options granted during the nine months ended September 30, 2026 are summarized as follows:

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During the nine months ended September 30, 2026, the Company granted 72 thousand time-based RSUs of Series C common stock to subsidiary employees. Such RSUs had a GDFV of $88.65 per share and generally vest in March 2028.

Also during the nine months ended September 30, 2026, the Company granted 153 thousand performance-based RSUs of Series C common stock to subsidiary employees. Such performance-based RSUs had a GDFV of $105.10 per share and vest in March 2030, subject to the satisfaction of certain performance objectives and based on an amount determined by the compensation committee. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. As the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The value of the grant is re-measured at each reporting period.

The Company did not grant any options to purchase shares of Series A or Series B common stock during the nine months ended September 30, 2026.

Liberty calculates the GDFV for all of its equity classified options and the subsequent remeasurement of its liability classified options using the Black-Scholes Model. Liberty estimates the expected term of the options based on historical exercise and forfeiture data. The volatility used in the calculation for options is based on the historical volatility of Liberty Media’s common stock and, when available, the implied volatility of publicly traded Liberty options. Liberty uses a zero-dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.

Outstanding Awards

The following table presents the number and weighted average exercise price ("WAEP") of options to purchase Series C common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the options.  

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As of September 30, 2026, 400 thousand options of Series B common stock remained outstanding at an exercise price of $85.09, a remaining contractual life of 6.2 years and an intrinsic value of approximately $1 million.  None of these options were exercisable as of September 30, 2026.

As of September 30, 2026, there were no outstanding options to purchase shares of Series A common stock.

As of September 30, 2026, the total unrecognized compensation cost related to unvested Awards was approximately $61 million. Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.9 years.

As of September 30, 2026, Liberty reserved 3.7 million shares of Series B and Series C common stock for issuance under exercise privileges of outstanding stock options.