Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  


Stock Compensation Plans


Time Lapse Restricted Shares and Restricted Stock Units


Time lapse restricted shares (TLRSs) have been issued to officers and other management employees under the Company’s Employee Stock Incentive Plan. The Company recognizes compensation expense for the unvested portion of awards outstanding over the remainder of the service period. The compensation cost recorded for these awards is based on their closing stock price at the grant date less the cost of estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. Cash flows related to share-based payment awards to employees that result in tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) are classified as a financing activity in the accompanying consolidated statements of cash flows.


TLRSs provide for the issuance of a share of the Company’s Common Stock at no cost to the holder and generally vest after a certain stipulated number of years from the grant date, depending on the terms of the issue. TLRSs vest in 20 percent increments starting with the second anniversary of the grant, over six years from the date of grant. During these years, grantees receive all dividends declared and retain voting rights for the granted shares. The agreements under which the restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the plans have lapsed.


The Company issued time lapse restricted shares of 0.5 million, 0.7 million, and 0.6 million for the years ended December 31, 2016, 2015, and 2014, respectively.


The Company issues new shares from its authorized but unissued share pool. At December 31, 2016, approximately 4.7 million shares of the Company’s common stock were reserved for issuance. In accordance with the FASB ASC Topic 718, “Compensation – Stock Compensation,” the Company recognizes the fair value of the award on a straight line basis over the service periods of each award. The Company estimates restricted share forfeiture rates based on its historical experience.


The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense ($ in thousands):


Years ended December 31,   2016     2015     2014  
Time Lapse Restricted Stock:                        
Pre-tax compensation expense   $ 12,415     $ 12,110     $ 10,579  
Tax benefit     (4,805 )     (4,687 )     (4,094 )
Restricted stock expense, net of tax   $ 7,610     $ 7,423     $ 6,485  


As of December 31, 2016 and 2015, $29.9 million and $31.3 million, respectively, of total unrecognized compensation cost related to time-lapse restricted shares are expected to be recognized over a weighted average period of approximately 3.8 years at December 31, 2016 and December 31, 2015, respectively.


The following table summarizes information on unvested restricted stock units outstanding as of December 31, 2016, 2015 and 2014:


    Number of Shares
(in thousands)
Grant-Date Fair
Unvested Restricted Stock Grants                
Unvested as of December 31, 2013     3,680     $ 12.50  
Forfeited     (178 )     14.27  
Vested     (1,018 )     10.31  
Granted     616       19.16  
Unvested as of December 31, 2014     3,100       14.45  
Forfeited     (85 )     15.71  
Vested     (946 )     12.04  
Granted     682       22.43  
Unvested as of December 31, 2015     2,751       17.21  
Forfeited     (114 )     19.54  
Vested     (879 )     14.49  
Granted     503       26.45  
Unvested as of December 31, 2016     2,261     $ 20.21