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Share-Based Compensation | 9 Months Ended
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Sep. 30, 2018
Share Based Compensation [Abstract] |
Share-Based Compensation |
14. | Share-Based Compensation
The Company has a long-term equity incentive plan, which allows for grants of restricted stock, performance awards, stock appreciation rights, and stock options to directors, officers, and employees, as well as others who engage in services for PCA. The plan, as amended, terminates May 1, 2023 and authorizes 10.6 million shares of common stock for grant over the life of the plan. As of September 30, 2018, 0.7 million shares were available for future grants under the plan. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date. The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2018:
|  | Restricted Stock |  |  | Performance Units |
|  | Shares |  |  | Weighted Average Grant- Date Fair Value |  |  | Shares |  |  | Weighted Average Grant- Date Fair Value |
Outstanding at January 1, 2018 |  |  | 739,732 |  |  | $ | 77.23 |  |  |  | 226,558 |  |  | $ | 77.07 |
Granted |  |  | 173,144 |  |  |  | 114.63 |  |  |  | 87,022 |  |  |  | 115.33 |
Vested |  |  | (163,436 | ) |  |  | 67.28 |  |  |  | (46,876 | ) |  |  | 74.46 |
Forfeitures |  |  | (3,738 | ) |  |  | 81.04 |  |  |  | — |  |  |  | — |
Outstanding at September 30, 2018 |  |  | 745,702 |  |  | $ | 88.07 |  |  |  | 266,704 |  |  | $ | 90.01 |
Compensation Expense Our share-based compensation expense is recorded in "Selling, general, and administrative expenses." Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures, was as follows (dollars in millions):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Restricted stock |  | $ | 4.9 |  |  | $ | 3.8 |  |  | $ | 13.9 |  |  | $ | 11.3 |
Performance units |  |  | 1.7 |  |  |  | 1.4 |  |  |  | 3.5 |  |  |  | 4.1 |
Total share-based compensation expense |  |  | 6.6 |  |  |  | 5.2 |  |  |  | 17.4 |  |  |  | 15.4 |
Income tax benefit |  |  | (1.6 | ) |  |  | (2.0 | ) |  |  | (4.4 | ) |  |  | (5.9 | )
Share-based compensation expense, net of tax benefit |  | $ | 5.0 |  |  | $ | 3.2 |  |  | $ | 13.0 |  |  | $ | 9.5 |
The fair value of restricted stock is determined based on the closing price of the Company’s stock on the grant date. Compensation expense, net of estimated forfeitures, is recorded over the requisite service period. As PCA’s Board of Directors has the ability to accelerate the vesting of these awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age. Performance unit awards are earned based on the achievement of defined performance rankings of Return on Invested Capital (ROIC) or Total Shareholder Return (TSR) compared to ROIC and TSR for peer companies. For performance unit awards made in 2018, 50% used TSR as the performance measure and 50% used ROIC as the performance measure. All units awarded before 2018 used ROIC as the performance measure. The ROIC component of performance unit awards are valued based on the closing price of the stock on the grant date. As the ROIC component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of performance unit awards is valued using a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free interest rate, expected dividends, and expected volatility of the Company’s common stock and the common stock of the peer companies. Compensation expense is recorded ratably over the expected term of the award. The unrecognized compensation expense for all share-based awards at September 30, 2018 was as follows (dollars in millions):
|  | September 30, 2018 |
|  | Unrecognized Compensation Expense |  |  | Remaining Weighted Average Recognition Period (in years) |
Restricted stock |  | $ | 36.5 |  |  | 2.5 |
Performance units |  |  | 15.7 |  |  |  | 3.1 |
Total unrecognized share-based compensation expense |  | $ | 52.2 |  |  |  | 2.7 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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