Stock-Based Compensation

The Company’s stock-based compensation expense for the three and nine months ended September 30, 2014 included performance-based restricted stock units (“PRSUs”), non-qualified stock options, restricted stock units ("RSUs") and deferred stock units ("DSUs"). A summary of the Company’s stock-based compensation expense is presented below:



(in millions)	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
PRSU expense	$	1.6	$	1.6	$	1.8	$	3.6
Option expense	1.8		2.1		5.2		6.3
RSU/DSU expense	0.6		1.9		2.4		3.9
Total stock-based compensation expense	$	4.0	$	5.6	$	9.4	$	13.8

Actual payout under the PRSUs granted in 2013 is dependent upon the achievement of certain financial goals. The Company recorded a $3.0 million benefit in the accompanying Condensed Consolidated Statements of Income for the nine months ended September 30, 2014, after re-evaluation of the probability of meeting these grants.

A summary of the Company’s PRSU activity and related information for the nine months ended September 30, 2014 is presented below:



(shares and aggregate intrinsic value in millions)
	Number of Shares		Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Awards outstanding at December 31, 2013	0.3		$	39.04
Granted	0.3		51.86
Vested	0.0		37.05
Forfeited	(0.3	)	39.64
Awards outstanding at September 30, 2014	0.3		$	51.86	$	15.7

The maximum number of shares to be awarded under the PRSUs granted during the nine months ended September 30, 2014 will be 0.7 million. Approximately 0.3 million shares will vest, if earned at the end of the two-year performance period ending on December 31, 2015. Approximately 0.4 million shares will vest if earned at the end of the three-year performance period ending on December 31, 2016.

During the nine months ended September 30, 2014, PRSUs with an aggregate intrinsic value of $1.4 million were issued from treasury stock following the satisfaction of certain financial metrics over the one year performance period. The PRSUs were issued from treasury stock at 100.0% of the target award, the maximum payout. During the nine months ended September 30, 2013, PRSUs with an aggregate intrinsic value of $14.9 million were issued from treasury stock following the satisfaction of certain financial metrics over the performance period. The PRSUs were issued from treasury stock at 282.0% of the target award, out of a maximum payout of 300.0%.

A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2014 is presented below:



(shares and aggregate intrinsic value in millions)
	Number of Shares		Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding December 31, 2013	2.8		$	21.73
Granted	0.2		51.91
Forfeited	0.0		50.67
Exercised	(0.2	)	20.18
Options outstanding at September 30, 2014	2.8		$	24.07	5.37	$	88.1
Options exercisable at September 30, 2014	2.3		$	19.18	4.61	$	86.1

The aggregate intrinsic value of options exercised during the three months ended September 30, 2014 and 2013 was $0.4 million and $1.1 million, respectively. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2014 and 2013 was $6.5 million and $13.4 million, respectively.

A summary of the Company’s RSU and DSU activity and related information for the nine months ended September 30, 2014 is presented below:



(shares and aggregate intrinsic value in millions)
	Number of Shares		Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Awards outstanding at December 31, 2013	0.2		$	47.00
Granted	0.0		52.87
Vested	(0.1	)	44.18
Forfeited	0.0		46.62
Awards outstanding at September 30, 2014	0.1		$	49.68	$	5.3

There were no RSUs granted during the nine months ended September 30, 2014. DSUs were granted during the nine months ended September 30, 2014, and will vest over one year.

The aggregate intrinsic value of RSUs issued from treasury stock during the three months ended September 30, 2014 was $0.1 million. There were no RSUs issued from treasury stock during the three months ended September 30, 2013. The aggregate intrinsic value of RSUs issued from treasury stock during the nine months ended September 30, 2014 and 2013 was $5.5 million and $6.4 million, respectively.

A summary of total unrecognized stock-based compensation expense based on current performance estimates related to the PRSUs, options, RSUs and DSUs granted during the nine months ended September 30, 2014 is presented below:



($ in millions)
	September 30, 2014		Weighted Average Remaining Vesting Period (Years)
Unrecognized PRSU expense	$	10.6	1.79
Unrecognized stock option expense	3.7		2.34
Unrecognized RSU/DSU expense	0.5		0.58
Total unrecognized stock-based compensation expense	$	14.8	1.89