Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

v3.8.0.1
Share-Based Compensation
 9 Months Ended
Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-Based Compensation

7. Share-Based Compensation

The Company has share-based compensation plans, which are more fully described in Note 9, Share-Based Compensation, to the Consolidated Financial Statements in the 2016 10-K. During the nine months ended September 30, 2017, the Company granted stock appreciation rights, or SARs, and stock units subject to service conditions and service and performance conditions.

In the second and third quarters of 2017, the Company granted performance stock unit awards to certain executives, which will vest on December 31, 2019 subject to their continued employment through that date and the achievement of certain performance conditions. The performance conditions include targets for Volume Points, adjusted earnings before interest and taxes, and adjusted earnings per share. These performance stock unit awards can vest at between 0% and 200% of the target award based on the achievement of the performance conditions.

For the three months ended September 30, 2017 and 2016, share-based compensation expense amounted to $9.9 million and $9.8 million, respectively. For the nine months ended September 30, 2017 and 2016, share-based compensation expense amounted to $32.6 million and $30.3 million, respectively. As of September 30, 2017, the total unrecognized compensation cost related to all non-vested stock awards was $55.5 million and the related weighted-average period over which it is expected to be recognized is approximately 1.5 years.

The following tables summarize the activity under all share-based compensation plans for the nine months ended September 30, 2017:

 

SARs

 

Awards

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

 

Aggregate

Intrinsic

Value(1)

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

(In millions)

 

Outstanding at December 31, 2016(2)(3)

 

 

11,998

 

 

$

41.52

 

 

6.0 years

 

$

148.7

 

Granted

 

 

1,358

 

 

$

57.30

 

 

 

 

 

 

 

Exercised

 

 

(2,511

)

 

$

28.62

 

 

 

 

 

 

 

Forfeited

 

 

(321

)

 

$

53.67

 

 

 

 

 

 

 

Outstanding at September 30, 2017(2)(3)

 

 

10,524

 

 

$

46.26

 

 

6.3 years

 

$

237.4

 

Exercisable at September 30, 2017(4)

 

 

6,308

 

 

$

45.61

 

 

4.9 years

 

$

150.6

 

 

(1)

The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards.

(2)

Includes 0.1 million market condition SARs as of both September 30, 2017 and December 31, 2016.

(3)

Includes 2.7 million and 2.9 million performance condition SARs as of September 30, 2017 and December 31, 2016, respectively.

(4)

Includes 1.5 million performance condition SARs.

The weighted-average grant date fair value of SARs granted during the three months ended September 30, 2017 and 2016 was $31.31 and $32.06, respectively. The weighted-average grant date fair value of SARs granted during the nine months ended September 30, 2017 and 2016 was $28.36 and $29.49, respectively. The total intrinsic value of SARs exercised during the three months ended September 30, 2017 and 2016 was $3.0 million and $17.9 million, respectively. The total intrinsic value of SARs exercised during the nine months ended September 30, 2017 and 2016 was $100.0 million and $32.0 million, respectively.

 

Incentive Plan and Independent Directors Stock Units

 

Shares

 

 

Weighted

Average

Grant Date

Fair Value

 

 

 

(In thousands)

 

 

 

 

 

Outstanding and nonvested December 31, 2016

 

 

26

 

 

$

62.35

 

Granted(1)

 

 

154

 

 

$

68.84

 

Vested

 

 

(24

)

 

$

62.42

 

Forfeited

 

 

—

 

 

 

—

 

Outstanding and nonvested September 30, 2017

 

 

156

 

 

$

68.77

 

 

(1)

This includes 134,388 performance based stock unit awards which represents the maximum amount that can vest.

 

The total vesting date fair value of stock units which vested during the three months ended September 30, 2017 and 2016 was $0.1 million and $0.2 million, respectively. The total vesting date fair value of stock units which vested during the nine months ended September 30, 2017 and 2016 was $1.9 million and $2.0 million, respectively.