XML 99 R50.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Stock-based compensation
The following table summarizes stock-based compensation expense recognized during 2019, 2018 and 2017:
Year Ended December 31,
2019
 
2018
 
2017
(Dollars in millions)
 
 
 
 
 
Stock option awards
$
3

 
$
5

 
$
10

Restricted stock unit awards
33

 
30

 
29

Performance share unit awards
21

 
17

 
5

Deferred compensation bonus and matching stock unit awards
—

 
—

 
1

Awards under Non-Employee Director compensation plan
2

 
2

 
1

Total stock-based compensation, before income taxes
59

 
54

 
46

Income tax benefit
(15
)
 
(14
)
 
(17
)
Total stock-based compensation expense, net of income taxes
$
44

 
$
40

 
$
29
Stock-based compensation, allocation by financial statement line item
The following table provides a summary of the classification of stock-based compensation expense included in the Consolidated Statement of Operations for the years ended:
December 31,
2019
 
2018
 
2017
(Dollars in millions)
 
 
 
 
 
Selling, general and administrative expense
$
54

 
$
49

 
$
42

Cost of services expense
5

 
5

 
4

Total stock-based compensation
$
59

 
$
54

 
$
46
Stock-based compensation, fair value assumptions
U.S. Cellular did not grant stock option awards in 2019, 2018 or 2017. 

TDS estimated the fair value of stock options granted in 2019, 2018 and 2017 using the Black-Scholes valuation model and the assumptions shown in the table below:
 
2019
 
2018
 
2017
Expected life
6.2 years

 
6.3 years

 
6.4 years

Expected annual volatility rate
29.0
%
 
28.6
%
 
30.4
%
Dividend yield
2.1
%
 
2.5
%
 
2.2
%
Risk-free interest rate
2.4
%
 
2.9
%
 
2.0
%
Estimated annual forfeiture rate
3.8
%
 
3.3
%
 
2.5
%
Summary of stock options
A summary of TDS stock options (total and portion exercisable) and changes during 2019 is presented in the tables and narrative below.
Common Share Options
Number of Options
 
Weighted Average Exercise Prices
 
Aggregate Intrinsic Value
(in millions)
 
Weighted Average Remaining Contractual Life
(in years)
Outstanding at December 31, 2018
4,763,000

 
$
26.57

 
 
 
 
(3,270,000 exercisable)
 
 
$
26.12

 
 
 
 
Granted
208,000

 
$
30.72

 
 
 
 
Exercised
(826,000
)
 
$
27.25

 
 
 
 
Forfeited
(54,000
)
 
$
27.70

 
 
 
 
Outstanding at December 31, 2019
4,091,000

 
$
26.63

 
$
4

 
5.0
(2,896,000 exercisable)
 
 
$
26.32

 
$
4

 
3.7

A summary of U.S. Cellular stock options outstanding (total and portion exercisable) and changes during 2019 is presented in the table below:
Common Share Options
Number of Options
 
Weighted Average
Exercise Price
 
Aggregate Intrinsic Value
(in millions)
 
Weighted Average Remaining Contractual Life
(in years)
Outstanding at December 31, 2018
806,000

 
$
43.10

 
 
 
 
(420,000 exercisable)
 
 
$
42.39

 
 
 
 
Exercised
(339,000
)
 
$
44.27

 
 
 
 
Expired
(7,000
)
 
$
45.87

 
 
 
 
Outstanding at December 31, 2019
460,000

 
$
42.20

 
$
—

 
4.9
(460,000 exercisable)
 
 
$
42.20

 
$
—

 
4.9
Summary of nonvested restricted stock units
A summary of TDS nonvested restricted stock units and changes during 2019 is presented in the table below:
Common Restricted Stock Units
Number
 
Weighted Average Grant Date Fair Value
Nonvested at December 31, 2018
1,212,000

 
$
25.73

Granted
425,000

 
$
28.81

Vested
(355,000
)
 
$
27.87

Forfeited
(49,000
)
 
$
26.11

Nonvested at December 31, 2019
1,233,000

 
$
26.16


A summary of U.S. Cellular nonvested restricted stock units at December 31, 2019, 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, 2018
1,569,000

 
$
39.74

Granted
478,000

 
$
46.81

Vested
(525,000
)
 
$
42.99

Forfeited
(61,000
)
 
$
39.38

Nonvested at December 31, 2019
1,461,000

 
$
40.90
Summary of nonvested performance share units
A summary of TDS nonvested performance share units and changes during 2019 is presented in the table below:
Common Performance Share Units
Number
 
Weighted Average Grant Date Fair Value
Nonvested at December 31, 2018
350,000

 
$
27.38

Granted
229,000

 
$
30.72

Vested
(99,000
)
 
$
29.45

Change in units based on approved performance factors
6,000

 
$
29.45

Forfeited
(7,000
)
 
$
30.33

Accumulated dividend equivalents
10,000

 
$
28.26

Nonvested at December 31, 2019
489,000

 
$
28.53


A summary of U.S. Cellular’s nonvested performance share units and changes during 2019 is presented in the table below:
Common Performance Share Units
Number
 
Weighted Average Grant Date Fair Value
Nonvested at December 31, 2018
768,000

 
$
37.78

Granted
323,000

 
$
46.43

Vested
(5,000
)
 
$
37.92

Change in units based on approved performance factors
188,000

 
$
38.81

Forfeited
(29,000
)
 
$
38.55

Nonvested at December 31, 2019
1,245,000

 
$
40.16