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Share-Based Compensation
 3 Months Ended
Mar. 31, 2015
Share-based Compensation [Abstract]  
Share-Based Compensation

4.     Share-Based Compensation

 

The following table presents the effects of share-based compensation included in Devon’s accompanying consolidated comprehensive statements of earnings. Devon’s gross general and administrative expense for the first three months of 2015 and 2014 includes $12 million and $1 million, respectively, of unit-based compensation related to grants made under EnLink’s long-term incentive plans.

 

The vesting for certain share-based awards was accelerated in the first quarter of 2014 in conjunction with the divestiture of Devon’s Canadian conventional assets. The associated expense for these accelerated awards is included in restructuring costs in the accompanying consolidated comprehensive statements of earnings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

(Millions)

Gross general and administrative expense

 

$
68 

 

$
57 

 

Share-based compensation expense capitalized pursuant to the

 

 

 

 

 

 

 

 full cost method of accounting for oil and gas properties

 

$
15 

 

$
13 

 

Related income tax benefit

 

$
14 

 

$
14 

 

 

Under its 2009 Long-Term Incentive Plan, as amended, Devon granted share-based awards to certain employees in the first quarter of 2015. The following sections include information related to these awards.

 

Restricted Stock Awards and Units

 

The following table presents a summary of Devon’s unvested restricted stock awards and units.

 

 

 

 

 

 

 

 

 

 

 

Restricted Stock Awards & Units

 

Weighted Average Grant-Date Fair Value

 

 

 

(Thousands)

 

 

 

Unvested at December 31, 2014

 

 
4,304 

 

$
60.85 

 Granted

 

 
2,613 

 

$
63.97 

 Vested

 

 
(674)

 

$
60.78 

 Forfeited

 

 
(101)

 

$
60.85 

Unvested at March 31, 2015

 

 
6,142 

 

$
62.18 

 

 

 

 

 

 

 

 

As of March 31, 2015, Devon’s unrecognized compensation cost related to unvested restricted stock awards and units was $302 million. Such cost is expected to be recognized over a weighted-average period of 3.0 years.

 

Performance-Based Restricted Stock Awards

 

The following table presents a summary of Devon’s performance-based restricted stock awards.

 

 

 

 

 

 

 

 

 

 

 

Performance Restricted Stock Awards

 

Weighted Average Grant-Date Fair Value

 

 

 

(Thousands)

 

 

 

Unvested at December 31, 2014

 

 
380 

 

$
59.41 

 Granted

 

 
205 

 

$
64.18 

 Vested

 

 
(59)

 

$
61.33 

Unvested at March 31, 2015

 

 
526 

 

$
61.06 

 

As of March 31, 2015, Devon’s unrecognized compensation cost related to these awards was $10 million. Such cost is expected to be recognized over a weighted-average period of 3.4 years.

 

Performance Share Units

 

The following table presents a summary of the grant-date fair values of performance share units granted in 2015 and the related assumptions.

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

Grant-date fair value

$
81.99 

-

$
85.05 

Risk-free interest rate
1.06% 

Volatility factor
26.2% 

Contractual term (in years)
2.89 

 

 

 

The following table presents a summary of Devon’s performance share units.

 

 

 

 

 

 

 

 

 

 

 

Performance Share Units

 

Weighted Average Grant-Date Fair Value

 

 

 

(Thousands)

 

 

 

Unvested at December 31, 2014

 

 
1,477 

 

$
70.90 

 Granted

 

 
786 

 

$
84.14 

 Vested

 

 
(337)

 

$
66.00 

 Forfeited

 

 
(14)

 

$
74.76 

Unvested at March 31, 2015 (1)

 

 
1,912 

 

$
76.27 

____________________________

(1)

A maximum of 3.8 million common shares could be awarded based upon Devon’s final total shareholder return ranking.

 

As of March 31, 2015, Devon’s unrecognized compensation cost related to unvested units was $74 million. Such cost is expected to be recognized over a weighted-average period of 2.4 years.

 

EnLink Share-Based Awards 

 

    In March 2015, the General Partner and EnLink issued restricted incentive units as bonus payments to officers and certain employees for 2014. The combined grant fair value was $7 million, and the total cost was recognized in the first quarter of 2015 due to the awards vesting immediately.

 

    As of March 31, 2015, the General Partner and EnLink both had unrecognized compensation cost related to unvested restricted incentive units of $27 million. Such cost is expected to be recognized for the General Partner and EnLink over a weighted-average period of 2.1 and 2.2 years, respectively. Additionally, the General Partner and EnLink both had unrecognized compensation cost related to unvested performance units of $4 million. Such cost is expected to be recognized over a weighted-average period of 2.1 years for both the General Partner and EnLink.