Stock-Based Compensation

6 Months Ended

Jun. 30, 2026

Note 8. Stock-Based Compensation

We recognized stock-based compensation expense of $11 million ($9 million, net of tax) and $9 million ($7 million, net of tax) for the three months ended June 30, 2026 and 2025, respectively, and $21 million ($14 million, net of tax) and $17 million ($12 million, net of tax) for the six months ended June 30, 2026 and 2025, respectively. These charges are included in selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

A summary of awards granted under the Omnibus Plan during the six months ended June 30, 2026 is as follows:

          
         Weighted-

         Weighted-

         Weighted-

          
         Number of

         Average

         Average

         Average

          
         Awards

         Exercise

         Grant Date

         Vesting

          
         Granted

         Price

         Fair Value

         Period

Stock options

561,941

53.64

23.32

3.0

Restricted stock units

486,987

53.64

3.0

Performance shares(1)

139,820

53.64

3.0

(1)

The information related to performance shares above assumes 100% of the performance condition, which is based on revenue and Adjusted EBITDA targets, is met. The ultimate number of performance shares that may be earned depends on the achievement of this performance condition.

As of June 30, 2026, there was $68 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, restricted stock units (“RSUs”) and performance shares. These costs are expected to be recognized over a weighted-average period of 2.15 years.