Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

Share-Based Compensation
3 Months Ended
Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based 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 2014 10-K. During the three months ended March 31, 2015, the Company granted stock awards subject to service conditions, and service and performance conditions, consisting of stock appreciation rights, or SARs, each with vesting terms fully described in the 2014 10-K.

In March 2015, the Company also granted SARs with service and market conditions to certain employees. These SARs vest on the third anniversary of grant subject to the employees’ continued employment through that date and the achievement of certain conditions related to the market value of the Company’s common shares. The fair value of these SARs was determined on the date of the grant using the Monte Carlo lattice model.

For the three months ended March 31, 2015 and 2014, share-based compensation expense amounted to $11.1 million and $11.0 million, respectively. As of March 31, 2015, the total unrecognized compensation cost related to all non-vested stock awards was $80.2 million and the related weighted-average period over which it is expected to be recognized is approximately 1.7 years.

The following tables summarize the activity under all share-based compensation plans for the three months ended March 31, 2015:


Stock Options & SARs

   Awards      Weighted
     (In thousands)                    (In millions)  

Outstanding at December 31, 2014 (3)

     11,169       $ 37.46         5.4 years       $ 110.6   


     3,181       $ 30.46         


     (1,775    $ 21.90         


     (30    $ 55.50         




Outstanding at March 31, 2015(2) (3)

  12,545    $ 37.84      6.8 years    $ 141.2   




Exercisable at March 31, 2015 (4)

  5,802    $ 28.94      4.7 years    $ 101.7   





(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.
(3) Includes 1.0 million and 2.2 million performance condition SARs as of December 31, 2014 and March 31, 2015, respectively.
(4) Includes 0.1 million performance condition SARs.
(5) Includes 0.1 million market condition and 1.2 million performance condition SARs.

The weighted-average grant date fair value of SARs granted during the three months ended March 31, 2015 and 2014 was $12.18 and $28.68, respectively. The total intrinsic value of stock options and SARs exercised during the three months ended March 31, 2015 and 2014 was $17.6 million and $14.8 million, respectively.


Incentive Plan and Independent Directors Stock Units

   Shares      Weighted
Grant Date
Fair Value
     (In thousands)         

Outstanding and nonvested December 31, 2014

     33       $ 63.67   


     —           —     


     (1    $ 59.98   


     (2    $ 59.98   




Outstanding and nonvested at March 31, 2015

  30    $ 63.97   





The total vesting date fair value of stock units which vested during the three months ended March 31, 2015 was less than $0.1 million. The total vesting date fair value of stock units which vested during the three months ended March 31, 2014 was $8.2 million.

The Company recognizes excess tax benefits associated with share-based compensation to shareholders’ deficit only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company, which are also subject to applicable limitations. As of March 31, 2015 and December 31, 2014, the Company had $24.2 million and $23.6 million, respectively, of unrealized excess tax benefits.