Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

5. Stock-Based Compensation Plans

Employee Stock Purchase Plan

Shares issued under the 2017 Employee Stock Purchase Plan during the three months ended March 31, 2019 and 2018, totaled 32,174 and 38,145, respectively.

Stock Options

A summary of stock option activity is as follows:

Stock Options	Number of Shares			Weighted- Average Exercise Price ($)		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value of In-the-Money Options ($)
Outstanding as of December 31, 2018		4,864,836		$	17.76
Exercised		(313,282	)		15.50
Forfeited		(3,496	)		17.89
Outstanding as of March 31, 2019		4,548,058		$	17.91		6.02	$	68,018,687
Exercisable as of March 31, 2019		3,946,163		$	17.58		5.80	$	60,350,648

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2018, was $7.03. The total intrinsic value of stock options exercised during the three months ended March 31, 2019 and 2018, was $5.3 million and $7.2 million,

respectively. There were no stock options granted during the three months ended March 31, 2019.

The fair value of options granted during the three months ended March 31, 2018, were estimated on the date of grant using the Black-Scholes option-pricing model, acceptable under ASC 718,

Compensation – Stock Compensation

(“ASC 718”), with the following weighted-average assumptions:

	Three Months Ended
	March 31, 2018
Expected life (years)		5.6
Risk-free interest rate		2.7	%
Expected volatility		26.4	%
Expected dividend yield		—

Expected volatilities are based on the Company’s historical common stock volatility, derived from historical stock price data for periods commensurate with the options’ expected life. The expected life of the options granted represents the period of time options are expected to be outstanding, based primarily on historical employee option exercise behavior. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero coupon bonds issued with a term equal to the expected life at the date of grant of the options. The expected dividend yield is zero, as the Company has historically paid no dividends and does not anticipate dividends to be paid in the future.

Long-term Incentive Program Performance Share Awards

A summary of nonvested long-term incentive program performance share awards (“LTIP performance shares”) is as follows:

Nonvested LTIP Performance Shares	Number of Shares at Expected Attainment			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2018		540,697		$	19.83
Forfeited		(1,036	)		20.12
Nonvested as of March 31, 2019		539,661		$	19.83

Restricted Share Awards

A summary of nonvested restricted share awards (“RSAs”) is as follows:

Nonvested Restricted Share Awards	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2018		213,337		$	20.21
Vested		(98,769	)		20.12
Forfeited		(3,975	)		20.12
Nonvested as of March 31, 2019		110,593		$	20.29

During the three months ended March 31, 2019, a total of 98,769 RSAs vested. The Company withheld 30,878 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

Total Shareholder Return Awards

A summary of nonvested total shareholder return awards (“TSRs”) is as follows:

Nonvested Total Shareholder Return Awards	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2018		718,931		$	29.25
Granted		436,674			47.90
Forfeited		(5,457	)		31.31
Nonvested as of March 31, 2019		1,150,148		$	36.32

The fair value of TSRs granted during the three months ended March 31, 2019 and 2018, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, using the following weighted-average assumptions:

	Three Months Ended March 31,
	2019			2018
Expected life (years)		2.8			2.9
Risk-free interest rate		2.5	%		2.4	%
Expected volatility		29.3	%		28.0	%
Expected dividend yield		—			—

Restricted Share Units

A summary of nonvested restricted share unit awards (“RSUs”) is as follows:

Nonvested Restricted Share Units	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2018		651,045		$	23.82
Granted		550,091			33.07
Vested		(173,547	)		23.36
Forfeited		(8,346	)		23.36
Nonvested as of March 31, 2019		1,019,243		$	28.90

During the three months ended March 31, 2019, a total of 173,547 RSUs vested. The Company withheld 53,274 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of March 31, 2019, there were unrecognized compensation costs of $31.6 million related to nonvested TSRs, $26.7 million related to nonvested RSUs, $3.0 million related to nonvested LTIP performance shares, $1.1 million related to nonvested stock options, and $1.9 million related to nonvested RSAs, which the Company expects to recognize over weighted-average periods of 2.3 years, 1.9 years, 1.0 years, 0.9 years, and 0.9 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2019 and 2018, of $6.6 million and $6.4 million, respectively, with corresponding tax benefits of $1.2 million and $1.0 million, respectively.