SHARE-BASED COMPENSATION

Performance Units

In Q1 2018, we awarded 153,200 performance units ("PSUs") to our executive officers. The PSUs awarded are earned after a three-year performance period, from 2018 through 2020, based on achievement of certain total shareholder return results relative to a comparison group of companies, which is a market condition, and, if earned, will be issued in the form of shares of Class A Common Stock. The number of shares that may be earned can range from 0% to 200% of the target amount; therefore, the maximum number of shares that can be issued under these awards is 306,400. These PSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the performance period. We used the Monte Carlo simulation model to calculate the fair value of these PSUs on the date of grant. The model resulted in a weighted average grant date fair value of $21.76 per unit for these PSUs, compared to $16.33 and $24.15 per unit for similar PSUs granted in 2017 and 2016, respectively.

The weighted average grant date fair values were determined using the following assumptions:



	2018 Awards		2017 Awards		2016 Awards
Three-year risk-free interest rate (1)	1.4	%	0.9	%	0.8	%
Expected term	3 years		3 years		3 years
Estimated volatility (2)	31.8	%	31.2	%	29.4	%

_______________________________________


(1)	Based on the U.S. government bond benchmark on the grant date.


(2)	Represents the historical price volatility of the Company’s common stock for the three-year period preceding the grant date.

The total PSU expense and associated tax benefit for all outstanding awards for the three months ended May 26, 2017 and May 27, 2016 are as follows:



	Three Months Ended
Performance Units	May 26, 2017		May 27, 2016
Expense	$	1.6	$	2.2
Tax benefit	0.6		0.8

As of May 26, 2017, there was $5.5 of remaining unrecognized compensation cost related to nonvested PSUs, which is expected to be recognized over a remaining weighted-average period of 1.9 years.

The PSU activity for the three months ended May 26, 2017 is as follows:



Maximum Number of Shares That May Be Issued Under Nonvested Units	Total	Weighted-Average Grant Date Fair Value per Unit
Nonvested as of February 24, 2017	916,420	$	19.31
Granted	306,400	21.76
Nonvested as of May 26, 2017	1,222,820	$	19.93

Restricted Stock Units

During the three months ended May 26, 2017, we awarded 647,148 restricted stock units ("RSUs"), of which 129,900 were awarded to our executive officers. These RSUs have restrictions on transfer which lapse three years after the date of grant, at which time the units will be issued as unrestricted shares of Class A Common Stock. RSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the requisite service period based on the value of the underlying shares on the date of grant.

The RSU expense and associated tax benefit for all outstanding awards for the three months ended May 26, 2017 and May 27, 2016 are as follows:



	Three Months Ended
Restricted Stock Units	May 26, 2017		May 27, 2016
Expense	$	6.5	$	6.7
Tax benefit	2.4		2.4

As of May 26, 2017, there was $13.3 of remaining unrecognized compensation cost related to nonvested RSUs, which is expected to be recognized over a weighted-average period of 2.1 years.

The RSU activity for the three months ended May 26, 2017 is as follows:



Nonvested Units	Total		Weighted-Average Grant Date Fair Value per Unit
Nonvested as of February 24, 2017	1,731,507		$	16.38
Granted	647,148		16.74
Vested	(12,638	)	16.33
Forfeited	(6,673	)	16.65
Nonvested as of May 26, 2017	2,359,344		$	16.48