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Stock-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2016
Share-based Compensation [Abstract] |
Stock-based compensation | The following table summarizes stock-based compensation expense recognized during 2016, 2015 and 2014:
Year Ended December 31, | 2016 |  | 2015 |  | 2014
(Dollars in millions) |  |  |  |  |  |  |  |
Stock option awards | $ | 16 |  | $ | 18 |  | $ | 16
Restricted stock unit awards |  | 24 |  |  | 20 |  |  | 18
Performance share awards |  | – |  |  | – |  |  | –
Deferred compensation bonus and matching stock unit awards |  | 1 |  |  | 1 |  |  | 1
Awards under Non-Employee Director compensation plan |  | 1 |  |  | 1 |  |  | 1
Total stock-based compensation, before income taxes |  | 42 |  |  | 40 |  |  | 36
Income tax benefit |  | (16) |  |  | (15) |  |  | (14)
Total stock-based compensation expense, net of income taxes | $ | 26 |  | $ | 25 |  | $ | 22
Stock-based compensation, allocation by financial statement line item | The following table provides a summary of the stock-based compensation expense included in the Consolidated Statement of Operations for the years ended:
December 31, | 2016 |  | 2015 |  | 2014
(Dollars in millions) |  |  |  |  |  |  |  |
Selling, general and administrative expense | $ | 39 |  | $ | 37 |  | $ | 33
Cost of services and products |  | 3 |  |  | 3 |  |  | 3
Total stock-based compensation | $ | 42 |  | $ | 40 |  | $ | 36
Stock-based compensation, fair value assumptions | TDS estimated the fair value of stock options granted in 2016, 2015 and 2014 using the Black Scholes valuation model and the assumptions shown in the table below:
| 2016 |  | 2015 |  | 2014
Expected life | 6.2 years |  | 6.1 years |  | 5.8 years
Expected annual volatility rate | 30.3% |  | 30.8% |  | 39.6%
Dividend yield | 2.0% |  | 1.9% |  | 2.0%
Risk-free interest rate | 1.3% |  | 1.8% |  | 1.8%
Estimated annual forfeiture rate | 2.7% |  | 3.2% |  | 2.9%
U.S. Cellular estimated the fair value of stock options granted during 2016, 2015 and 2014 using the Black-Scholes valuation model and the assumptions shown in the table below.
| 2016 |  | 2015 |  | 2014
Expected life | 4.7 years |  | 4.6 years |  | 4.5 years
Expected annual volatility rate | 30.5% |  | 30.1% |  | 28.0%-28.1%
Dividend yield | 0% |  | 0% |  | 0%
Risk-free interest rate | 1.2% |  | 1.2% |  | 1.4%-1.5%
Estimated annual forfeiture rate | 9.4% |  | 9.7% |  | 9.4%
Summary of stock options | A summary of TDS stock options (total and portion exercisable) and changes during 2016 is presented in the tables and narrative below.
|  |  |  |  |  |  |  |  |  | Weighted
|  |  |  |  |  |  |  |  |  | Average
|  |  |  | Weighted |  | Aggregate |  | Remaining
|  |  |  | Average |  | Intrinsic |  | Contractual
|  | Number of |  | Exercise |  | Value |  | Life
Common Share Options |  | Options |  | Prices |  | (in millions) |  | (in years)
Outstanding at December 31, 2015 |  | 9,135,000 |  | $ | 30.29 |  |  |  |  |
(6,009,000 exercisable) |  |  |  |  | 32.54 |  |  |  |  |
Granted |  | 694,000 |  |  | 29.45 |  |  |  |  |
Exercised |  | (562,000) |  |  | 22.92 |  |  |  |  |
Forfeited |  | (67,000) |  |  | 28.13 |  |  |  |  |
Expired |  | (523,000) |  |  | 42.56 |  |  |  |  |
Outstanding at December 31, 2016 |  | 8,677,000 |  | $ | 29.98 |  | $ | 19 |  | 4.8
(6,167,000 exercisable) |  |  |  | $ | 30.59 |  | $ | 17 |  | 3.3
A summary of U.S. Cellular stock options outstanding (total and portion exercisable) and changes during 2016 is presented in the table below:
|  |  |  |  |  |  |  |  |  | Weighted
|  |  |  |  |  |  |  |  |  | Average
|  |  |  | Weighted |  | Aggregate |  | Remaining
|  |  |  | Average |  | Intrinsic |  | Contractual
|  | Number of |  | Exercise |  | Value |  | Life
Common Share Options |  | Options |  | Price |  | (in millions) |  | (in years)
Outstanding at December 31, 2015 |  | 4,102,000 |  | $ | 40.62 |  |  |  |  |
(1,849,000 exercisable) |  |  |  |  | 44.33 |  |  |  |  |
Granted |  | 898,000 |  |  | 45.87 |  |  |  |  |
Exercised |  | (541,000) |  |  | 35.34 |  |  |  |  |
Forfeited |  | (197,000) |  |  | 39.08 |  |  |  |  |
Expired |  | (289,000) |  |  | 50.06 |  |  |  |  |
Outstanding at December 31, 2016 |  | 3,973,000 |  | $ | 41.92 |  | $ | 14 |  | 6.8
(1,937,000 exercisable) |  |  |  | $ | 42.54 |  | $ | 7 |  | 5.0
Summary of nonvested restricted stock units | A summary of TDS nonvested restricted stock units and changes during 2016 is presented in the table below:
Common Restricted Stock Units |  | Number |  | Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2015 |  | 1,044,000 |  | $ | 24.70
Granted |  | 452,000 |  | $ | 27.87
Vested |  | (341,000) |  | $ | 21.26
Forfeited |  | (25,000) |  | $ | 26.46
Nonvested at December 31, 2016 |  | 1,130,000 |  | $ | 26.97
A summary of U.S. Cellular nonvested restricted stock units at December 31, 2016 and changes during the year then ended is presented in the table below:
Common Restricted Stock Units |  | Number |  | Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2015 |  | 1,194,000 |  | $ | 36.70
Granted |  | 571,000 |  |  | 43.32
Vested |  | (348,000) |  |  | 31.52
Forfeited |  | (107,000) |  |  | 39.28
Nonvested at December 31, 2016 |  | 1,310,000 |  | $ | 40.74
Summary of nonvested performance share awards | A summary of TDS nonvested Performance Shares and changes during 2016 is presented in the table below:
Common Performance Shares |  | Number |  | Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2015 |  | – |  | $ | –
Granted |  | 97,000 |  | $ | 29.45
Nonvested at December 31, 2016 |  | 97,000 |  | $ | 29.45

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- Definition Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(1) -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14.F) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 + Details
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- Definition Tabular disclosure of the number and weighted-average exercise prices (or conversion ratios) for share options (or share units) that were outstanding at the beginning and end of the year, vested and expected to vest, exercisable or convertible at the end of the year, and the number of share options or share units that were granted, exercised or converted, forfeited, and expired during the year. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c)(1) -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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