Share-Based Compensation

3 Months Ended

Mar. 31, 2016

4. Share-Based Compensation

The following table presents the effects of share-based compensation included in Devon’s accompanying consolidated comprehensive statements of earnings. Gross G&A expense for the first three months of 2016 and 2015 includes $6 million and $12 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 2016 in conjunction with the reduction of workforce described in Note 6. For the three months ended March 31, 2016, approximately $67 million of associated expense for these accelerated awards is included in restructuring and transaction costs in the accompanying consolidated comprehensive statements of earnings.



	Three Months Ended March 31,
	2016		2015

	(Millions)
Gross G&A for share-based compensation	$	45	$	68
Share-based compensation expense capitalized pursuant to the
full cost method of accounting for oil and gas properties	$	12	$	15
Related income tax benefit	$	9	$	14

Under its approved long-term incentive plan, Devon granted share-based awards to certain employees in the first three months of 2016. The following table presents a summary of Devon’s unvested restricted stock awards and units, performance-based restricted stock awards and performance share units granted under the plan.


	Restricted Stock			Performance-Based			Performance
	Awards and Units			Restricted Stock Awards			Share Units
	Awards and Units		Weighted Average Grant-Date Fair Value	Awards		Weighted Average Grant-Date Fair Value	Units			Weighted Average Grant-Date Fair Value

	(Thousands, except fair value data)
Unvested at 12/31/15	4,738	$	62.49	434	$	60.48	1,859		$	76.17
Granted	4,261	$	19.31	330	$	19.22	1,388		$	10.41
Vested	(1,167)	$	62.55	(102)	$	62.55	(602)		$	63.37
Forfeited	(74)	$	60.24	-	$	-	(7)		$	81.67
Unvested at 3/31/16	7,758	$	38.79	662	$	39.57	2,638	(1)	$	46.52

____________________________

(1) A maximum of 5.3 million common shares could be awarded based upon Devon’s final TSR ranking relative to Devon’s peer group established under applicable award agreements.

The following table presents the assumptions related to the performance share units granted in 2016, as indicated in the previous summary table.


	2016

Grant-date fair value	$	9.24	-	$	10.61
Risk-free interest rate	0.94%
Volatility factor	37.7%
Contractual term (years)	2.83

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of March 31, 2016.


			Performance-Based
	Restricted Stock		Restricted Stock		Performance
	Awards and Units		Awards		Share Units
Unrecognized compensation cost (millions)	$	180	$	10	$	40
Weighted average period for recognition (years)		2.7		2.8		1.9

EnLink Share-Based Awards

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with the General Partner’s and EnLink’s unvested restricted incentive units and performance units as of March 31, 2016.


	General Partner				EnLink
	Restricted		Performance		Restricted		Performance
	Incentive Units		Units		Incentive Units		Units
Unrecognized compensation cost (millions)	$	22	$	5	$	22	$	5
Weighted average period for recognition (years)		1.9		2.2		1.9		2.2