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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | Share-Based Compensation We provide equity awards to our employees under the GATX Corporation 2012 Incentive Award Plan, including grants of stock appreciation rights, restricted stock units, performance shares and phantom stock awards. As of December 31, 2014, 3.5 million shares were authorized under the 2012 Plan and 2.4 million shares were available for future issuance. We recognize compensation expense for our equity awards in selling, general and administrative expenses over the service period of each award. Share-based compensation expense was $14.0 million for 2014, $13.1 million for 2013, and $12.2 million for 2012, and the related tax benefits were $5.3 million for 2014, $4.9 million for 2013, and $4.6 million for 2012. Stock Options and Stock Appreciation Rights Stock options and stock appreciation rights entitle the holder to purchase shares of common stock for periods up to seven years from the grant date. Stock appreciation rights entitle the holder to receive the difference between the market price of our common stock at the time of exercise and the exercise price, either in shares of common stock, cash, or a combination thereof, at our discretion. Stock options entitle the holder to purchase shares of our common stock at a specified exercise price. Since 2006, only stock-settled stock appreciation rights have been awarded. The dividends that accrue on all stock options and stock appreciation rights are paid upon vesting and continue to be paid until the stock options or stock appreciation rights are exercised, canceled, or expire. The exercise price for stock options and stock appreciation rights is equal to the average of the high and low trading prices of our common stock on the date of grant. We recognize compensation expense on a straight-line basis over the vesting period of the award, which is generally three years. The estimated fair value of a stock appreciation right is the sum of the value we derive using the Black-Scholes option pricing model and the present value of dividends we expect to pay over the expected term of the stock appreciation right. The Black-Scholes valuation incorporates various assumptions, including expected term, expected volatility, and risk free interest rates. We base the expected term on historical exercise patterns and post-vesting terminations, and we base the expected volatility on the historical volatility of our stock price over a period equal to the expected term. We use risk-free interest rates that are based on the implied yield on recently-issued US Treasury zero-coupon bonds with a term comparable to the expected term. The following table shows the weighted average fair value for our stock appreciation rights and the assumptions we used to estimate fair value:
| 2014 |  | 2013 |  | 2012
Weighted average estimated fair value | $ | 18.12 |  |  | $ | 18.89 |  |  | $ | 18.48 |
Quarterly dividend rate | $ | 0.33 |  |  | $ | 0.30 |  |  | $ | 0.29 |
Expected term of stock appreciation rights, in years | 4.4 |  |  | 4.7 |  |  | 4.7 |
Risk-free interest rate | 1.3 | % |  | 0.7 | % |  | 1.0 | %
Dividend yield | 2.3 | % |  | 2.6 | % |  | 2.7 | %
Expected stock price volatility | 30.3 | % |  | 42.4 | % |  | 43.3 | %
Present value of dividends | $ | 5.76 |  |  | $ | 5.60 |  |  | $ | 5.37 |
The following table shows information about outstanding stock options and stock appreciation rights for the year ended December 31, 2014:
| Number of Stock Options and Stock Appreciation Rights (in thousands) |  | Weighted Average Exercise Price
Outstanding at beginning of the year | 1,694 |  | $ | 36.03 |
Granted | 297 |  | 58.50 |
Exercised | (467) |  | 37.71 |
Forfeited/Cancelled | (33) |  | 50.71 |
Expired | (1) |  | 41.02 |
Outstanding at end of the year | 1,490 |  | 39.65 |
Vested and exercisable at end of the year | 919 |  | 32.08 |
The following table shows the aggregate intrinsic value of stock options and stock appreciation rights exercised in 2014, 2013, and 2012, and the weighted average remaining contractual term and aggregate intrinsic value of stock appreciation rights outstanding and vested as of December 31, 2014:
Stock Options and Stock Appreciation Rights | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Exercised in 2012 |  |  | $ | 4.9 |
Exercised in 2013 |  |  | 6.9 |
Exercised in 2014 |  |  | 11.8 |
Outstanding at December 31, 2014 (a) | 3.7 |  | 27.5 |
Vested and exercisable at December 31, 2014 | 2.6 |  | 23.8 |
__________________ (a) As of December 31, 2014, there are no remaining stock options outstanding. As of December 31, 2013, all stock options were either exercised or called. Therefore, no cash was received from employees for exercises of stock options during the year ended December 31, 2014. The total cash we received from employees for exercises of stock options during the years ended December 31, 2013 and December 31, 2012 was $1.2 million and $5.6 million. As of December 31, 2014, we had $14.1 million of unrecognized compensation expense related to nonvested stock appreciation rights, which we expect to recognize over a weighted average period of 1.7 years. Restricted Stock Units and Performance Shares Restricted stock units entitle the recipient to receive a specified number of restricted shares of common stock upon vesting. Restricted stock units do not carry voting rights and are not transferable prior to the expiration of a specified restriction period, which is generally three years, as determined by the Compensation Committee of the Board of Directors ("Compensation Committee"). We accrue dividends on all restricted stock units and pay those dividends when the awards vest. We recognize compensation expense for these awards over the applicable vesting period. Performance shares are restricted shares that we grant to key employees for achieving certain strategic objectives. The shares convert to common stock at the end of a specified performance period if predetermined performance goals are achieved, as determined by the Compensation Committee. We estimate the number of shares we expect will vest as a result of actual performance against the performance criteria at the time of grant to determine total compensation expense to be recognized. We reevaluate the estimate annually and adjust total compensation expense for any changes to the estimate of the number of shares we expect to vest. We recognize compensation expense for these awards over the applicable vesting period, which is generally three years. The performance shares granted in 2014 include an option to settle shares earned in cash upon vesting. We value our restricted stock units and performance share awards using the average of the high and low values of our common stock on the grant date of the awards. As of December 31, 2014, there was $7.9 million of unrecognized compensation expense related to these awards, which we expect to be recognized over a weighted average period of 1.8 years. The following table shows information about restricted stock units and performance shares for the year ended December 31, 2014:
| Number of Share Units Outstanding |  | Weighted Average Grant-Date Fair Value
Restricted Stock Units: |  |  |
Nonvested at beginning of the year | 200,050 |  |  | $ | 41.17 |
Granted | 56,020 |  |  | 58.66 |
Vested | (70,986 | ) |  | 34.77 |
Forfeited | (7,874 | ) |  | 49.42 |
Nonvested at end of the year | 177,210 |  |  | 48.90 |
Performance Shares: |  |  |
Nonvested at beginning of the year | 160,332 |  |  | $ | 44.48 |
Granted | 62,670 |  |  | 53.63 |
Net increase due to estimated performance | 67,392 |  |  | 47.49 |
Vested | (92,958 | ) |  | 44.02 |
Forfeited | (22,367 | ) |  | 46.57 |
Nonvested at end of the year | 175,069 |  |  | 48.95 |
The total fair value of restricted stock units and performance shares that vested during the year was $6.6 million in 2014, $7.5 million in 2013, and $5.6 million in 2012. Phantom Stock Awards We grant phantom stock awards to non-employee directors as a component of their compensation for service on our board of directors. In accordance with the terms of the phantom stock awards, each director is credited with a quantity of units that equate to, but are not, common shares. Phantom stock awards are dividend participating, and all dividends are reinvested in additional phantom shares at the average of the high and low trading prices of our stock on the dividend payment date. At the expiration of each director’s service on the board of directors, or in accordance with his or her deferral election, whole units of phantom stock will be settled with shares of common stock and fractional units will be paid in cash. In 2014, we granted 17,473 units of phantom stock and there were 147,962 units outstanding as of December 31, 2014.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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