Stockholders' Equity

1.625% Exchange

As described in Note 7, “Debt,” we issued 1.8 million shares of our common stock in connection with the 1.625% Exchange in March 2018.

1.125% Warrants

In connection with the Call Spread Overlay transaction described in Note 8, “Derivatives,” in 2013, we issued 13,490,236 warrants with a strike price of $53.8475 per share. Under certain circumstances, beginning in April 2020, when the price of our common stock exceeds the strike price of the 1.125% Warrants, we will be obligated to issue shares of our common stock subject to a share delivery cap. The 1.125% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the 1.125% Warrants. Refer to Note 3, “Net Income per Share,” for dilution information for the periods presented. We will not receive any additional proceeds if the 1.125% Warrants are exercised.

Share-Based Compensation

In connection with our equity incentive plans and employee stock purchase plan, approximately 127,000 shares of common stock vested or were purchased, net of shares used to settle employees’ income tax obligations, during the three months ended March 31, 2018.

We record share-based compensation as “General and administrative expenses” in the accompanying consolidated statements of income. As of March 31, 2018, there was $53 million of total unrecognized compensation expense related to unvested restricted stock awards (RSAs), performance stock awards (PSAs), and performance stock units (PSUs), which we expect to recognize over a remaining weighted-average period of 3.2 years, 0.9 years and 2.7 years, respectively. This unrecognized compensation cost assumes an estimated forfeiture rate of 9.7% for non-executive employees as of March 31, 2018.

Also as of March 31, 2018, there was $13 million of total unrecognized compensation expense related to unvested stock options, which we expect to recognize over a weighted-average period of 2.5 years. No stock options were granted or exercised in the three months ended March 31, 2018.

Activity for RSAs, PSAs and PSUs, for the three months ended March 31, 2018, is summarized below:



	Restricted Stock Awards		Performance Stock Awards		Performance Stock Units		Total		Weighted Average Grant Date Fair Value
Unvested balance, December 31, 2017	401,804		84,762		91,828		578,394		$	58.35
Granted	321,798		—		188,455		510,253		72.46
Vested	(163,043	)	(32,929	)	—		(195,972	)	55.16
Forfeited	(59,931	)	(44,384	)	(47,650	)	(151,965	)	62.99
Unvested balance, March 31, 2018	500,628		7,449		232,633		740,710		67.96

The total fair value of awards granted and vested is presented in the following table:



	Three Months Ended March 31,
	2018		2017
	(In millions)
Granted:
Restricted stock awards	$	23	$	17
Performance stock units	14		—
	$	37	$	17
Vested:
Restricted stock awards	$	12	$	10
Performance stock awards	3		6
	$	15	$	16