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STOCKHOLDERS' EQUITY AND EQUITY INSTRUMENTS
 12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
STOCKHOLDERS' EQUITY AND EQUITY INSTRUMENTS STOCKHOLDERS’ EQUITY AND EQUITY INSTRUMENTS
The Company paid dividends of $2.88 per share in 2019 and currently intends to continue paying quarterly cash dividends. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Company’s Board of Directors and will depend upon many factors, including the Company’s financial condition, earnings, legal requirements, restrictions in its debt agreements (see Note 10) and other factors the Company’s Board of Directors deems relevant.

Non-Employee Director Compensation
Non-employee directors may defer all or a portion of the fees payable for their service into deferred stock units, equivalent to the value of the Company’s common stock. Additionally, as dividends are declared on the Company’s common stock, these deferred stock units are entitled to accrete dividends in the form of additional units based on the stock price on the dividend payment date. Accumulated deferred stock units are distributed in the form of Company common stock at a future specified date or following resignation from the Board of Directors, based upon the director’s annual election. During the years ended December 31, 2019, 2018 and 2017, members of the Board of Directors were credited with 33,883, 26,291 and 17,207 deferred stock units, respectively. During the years ended December 31, 2019, 2018 and 2017, 9,041, 6,728 and 6,668 shares of common stock, respectively, were issued from treasury shares for director compensation.

Preferred stock
The Company is authorized to issue up to 10,000,000 shares of preferred stock, of which no shares are currently issued or outstanding. Of those, 200,000 shares of preferred stock were designated as series A junior participating preferred stock in connection with the Company’s now expired rights agreement.

Equity Compensation Awards
In 2005, the Company adopted the 2005 Incentive Award Plan (as amended, the “2005 Plan”), which authorizes the issuance of 3,240,000 shares of Company common stock. In May 2015, the Company’s shareholders approved the 2015 Incentive Award Plan (as amended, the “2015 Plan”), which authorizes the issuance of 3,000,000 shares of Company common stock. Since the date the 2015 Plan was approved, the Company ceased issuing equity awards under the 2005 Plan. The 2005 Plan and 2015 Plan allow for grants of equity awards to executive officers, other employees and directors, including shares of common stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options and deferred stock units. The grants occur following approval by the compensation committee of the Company’s Board of Directors, with the amount and terms communicated to employees shortly thereafter. 

Options
Substantially all of the stock options granted under both the 2005 Plan and 2015 Plan vest ratably, in tranches, over a four-year service period. Unexercised options expire after 7 years. Options do not have dividend or voting rights. Upon vesting, each option can be exercised to purchase one share of the Company’s common stock. The exercise price of options is equal to the closing stock price on the day of grant.
To estimate the fair value of options on the grant date, the Company uses the Black-Scholes option valuation model. Award recipients are grouped according to expected exercise behavior. Unless better information is available to estimate the expected term of the options, the estimate is based on historical exercise experience. The risk-free rate, using U.S. Treasury yield curves in effect at the time of grant, is selected based on the expected term of each group. The Company’s historical stock price is used to estimate expected volatility. The weighted average assumptions and fair values for options granted for each of the years ended December 31 is included in the following table.
 
 
2019
 
2018
 
2017
Fair value of options granted
 
$
9.15

 
$
8.77

 
$
9.54

Expected term (years)
 
4.5

 
4.5

 
4.5

Expected volatility
 
28.0
%
 
22.9
%
 
23.2
%
Dividend yield
 
4.1
%
 
3.6
%
 
3.5
%
Risk-free interest rates
 
2.3
%
 
2.5
%
 
1.8
%


RSUs
Most of the RSUs granted under the 2015 Plan vest after three years of service entitling the holders to one share of common stock for each vested RSU. The unvested RSUs do not have voting rights but are entitled to receive non-forfeitable dividends (generally after a performance hurdle has been satisfied for the year of the grant) or other distributions that may be declared on the Company’s common stock equal to the per-share dividend declared. The closing stock price on the day of grant is used to determine the fair value of RSUs.

PSUs
Substantially all of the PSUs granted under the 2015 Plan are either total shareholder return PSUs (the “TSR PSUs”) or return on invested capital PSUs (the “ROIC PSUs”). The actual number of shares of the Company’s common stock that may be earned with respect to TSR PSUs is calculated by comparing the Company’s total shareholder return to the total shareholder return for each company comprising the Russell 3000 Index (for TSR PSUs granted in 2017 and earlier) or the Company’s peer group (for TSR PSUs granted in 2018 and later) over the three-year performance period and may range from 0% to 150% of the target number of shares based upon the attainment of these performance conditions. The actual number of shares of common stock that may be earned with respect to ROIC PSUs is calculated based on the average of the Company’s annual return on invested capital for each year in the three-year performance period and may range from 0% to 200% of the target number of shares based upon the attainment of these performance conditions.
ROIC PSUs granted in 2019 have a three-year performance period that begins in 2019 and ends in 2021. Generally, TSR PSUs granted in 2019 have a three-year performance period that begins on the grant date and ends on the third anniversary following the grant date. Both types of PSUs granted in 2019 generally vest three years from the grant date. PSUs represent a target number of shares of Company common stock that may be earned before adjustment based upon the attainment of certain performance conditions. Holders of PSUs are entitled to receive non-forfeitable dividends or other distributions equal to those declared on the Company’s common stock for PSUs that are earned, which are paid when the shares underlying the PSUs are issued.
To estimate the fair value of the TSR PSUs on the grant date, the Company uses a Monte-Carlo simulation model, which simulates future stock prices of the Company as well as the companies comprising the Russell 3000 Index or peer group. This model uses historical stock prices to estimate expected volatility and the Company’s correlation to the related benchmark. The risk-free rate was determined using the same methodology as the option valuations as discussed above. The Company’s closing stock price on the grant date was used to estimate the fair value of the ROIC PSUs. The Company will adjust the expense of the
ROIC PSUs based upon its estimate of the number of shares that will ultimately vest at each interim date during the three-year vesting period.
The following is a summary of the Company’s stock option, RSU and PSU activity and related information for the following periods:
 
 
Stock Options
 
RSUs
 
PSUs
 
 
Number
 
Weighted-average exercise price
 
Number
 
Weighted-average fair value
 
Number
 
Weighted-average fair value
Outstanding at
December 31, 2016
 
442,755

 
$
80.07

 
63,780

 
$
80.25

 
89,011

 
$
89.43

Granted
 
227,351

 
68.00

 
34,635

 
68.00

 
58,878

 
73.08

Exercised(a)
 
(3,366
)
 
76.03

 
—

 
—

 
—

 
—

Released from restriction(a)
 
—

 
—

 
(15,806
)
 
84.77

 
(12,946
)
 
105.77

Cancelled/Expired
 
(103,863
)
 
76.44

 
(11,753
)
 
71.96

 
(22,907
)
 
86.81

Outstanding at
December 31, 2017
 
562,877

 
$
75.89

 
70,856

 
$
74.63

 
112,036

 
$
79.48

Granted
 
250,514

 
59.61

 
42,013

 
60.28

 
67,235

 
64.30

Exercised(a)
 
—

 
—

 
—

 
—

 
—

 
—

Released from restriction(a)
 
—

 
—

 
(16,905
)
 
88.78

 
(2,753
)
 
78.92

Cancelled/Expired
 
(104,645
)
 
71.65

 
(12,656
)
 
66.53

 
(49,880
)
 
85.51

Outstanding at
December 31, 2018
 
708,746

 
$
70.76

 
83,308

 
$
65.75

 
126,638

 
$
69.06

Granted
 
369,716

 
54.15

 
218,071

 
49.73

 
123,003

 
56.88

Exercised(a)
 
—

 
—

 
—

 
—

 
—

 
—

Released from restriction(a)
 
—

 
—

 
(32,630
)
 
66.95

 
—

 
—

Cancelled/Expired
 
(190,595
)
 
69.06

 
(51,336
)
 
54.87

 
(70,244
)
 
67.20

Outstanding at
December 31, 2019
 
887,867

 
$
64.21

 
217,413

 
$
52.07

 
179,397

 
$
61.43


(a)
Common stock issued for exercised options, vested RSUs and vested and earned PSUs were issued from treasury shares.

As of December 31, 2018, there were 708,746 options outstanding of which 446,794 were exercisable. The following table summarizes information about options outstanding and exercisable at December 31, 2019.
 
 
Options Outstanding
 
Options Exercisable
Range of exercise prices
 
Options outstanding
 
Weighted-average remaining contractual life (years)
 
Weighted-average exercise price of options outstanding
 
Options exercisable
 
Weighted-average remaining contractual life (years)
 
Weighted-average exercise price of exercisable options
$53.75 - $54.38
 
252,245

 
6.3
 
$
53.75

 
—

 
—

 
$
—

$54.39 - $57.26
 
99,728

 
6.3
 
55.01

 
—

 
—

 
—

$57.27 - $63.75
 
173,432

 
5.3
 
59.50

 
90,701

 
5.3

 
59.50

$63.76 - $72.85
 
203,854

 
3.7
 
69.00

 
167,551

 
3.6

 
69.11

$72.86 - $91.75
 
158,608

 
1.2
 
85.62

 
158,608

 
1.2

 
85.62

Totals
 
887,867

 
4.6
 
$
64.21

 
416,860

 
3.0

 
$
73.30



During the years ended December 31, 2019, 2018 and 2017, the Company recorded compensation expense of $6.3 million, $7.8 million and $5.0 million, respectively, related to its stock-based compensation awards that are expected to vest. No amounts have been capitalized. The fair value of options vested was $0.8 million, $2.7 million and $1.4 million in 2019, 2018 and 2017, respectively.
As of December 31, 2019, unrecorded compensation cost related to non-vested awards of $12.6 million is expected to be recognized from 2020 through 2022, with a weighted average period of 2.2 years.
The intrinsic value of stock options exercised during the twelve months ended December 31, 2019, 2018 and 2017 each totaled less than $0.1 million. As of December 31, 2019, the intrinsic value of options outstanding totaled $2.7 million, of which 416,860 options with an intrinsic value of $0.1 million were exercisable. The number of shares held in treasury is sufficient to cover all outstanding equity awards as of December 31, 2019.

Accumulated Other Comprehensive Loss
The Company’s comprehensive income (loss) is comprised of net earnings, net amortization of the unrealized loss of the pension obligation, the change in the unrealized gain (loss) on natural gas and foreign currency cash flow hedges, and foreign currency translation adjustments. The components of and changes in accumulated other comprehensive loss (“AOCL”) for the twelve months ended December 31, 2019 and 2018 are as follows (in millions):
Twelve Months Ended December 31, 2019(a)
 
Gains and (Losses) on Cash Flow Hedges
 
Defined Benefit Pension
 
Foreign Currency
 
Total
Beginning balance
 
$
(0.7
)
 
$
(4.5
)
 
$
(205.7
)
 
$
(210.9
)
Other comprehensive income (loss) before reclassifications
 
2.2

 
(2.7
)
 
21.1

 
20.6

Amounts reclassified from accumulated other comprehensive loss
 
(2.1
)
 
0.3

 
—

 
(1.8
)
Net current period other comprehensive income (loss)
 
0.1

 
(2.4
)
 
21.1

 
18.8

Ending balance
 
$
(0.6
)
 
$
(6.9
)
 
$
(184.6
)
 
$
(192.1
)

Twelve Months Ended December 31, 2018(a)
 
Gains and (Losses) on Cash Flow Hedges
 
Defined Benefit Pension
 
Foreign Currency
 
Total
Beginning balance
 
$
(0.9
)
 
$
(3.9
)
 
$
(73.1
)
 
$
(77.9
)
Other comprehensive income (loss) before reclassifications
 
2.2

 
(0.8
)
 
(132.6
)
 
(131.2
)
Amounts reclassified from accumulated other comprehensive loss
 
(1.8
)
 
0.2

 
—

 
(1.6
)
Net current period other comprehensive income (loss)
 
0.4

 
(0.6
)
 
(132.6
)
 
(132.8
)
Reclassification of stranded tax out of AOCI to retained earnings(b)
 
(0.2
)
 
—

 
—

 
(0.2
)
Ending balance
 
$
(0.7
)
 
$
(4.5
)
 
$
(205.7
)
 
$
(210.9
)

(a)
With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the table are reflected net of applicable income taxes.
(b)
In the first quarter of 2018, the Company adopted guidance which allows entities to reclassify tax effects of the change in U.S. income tax rates from AOCL to retained earnings.

Twelve Months Ended December 31, 2019
 
Amount Reclassified from AOCL
 
Line Item Impacted in the Consolidated Statement of Operations
Losses on cash flow hedges:
 
 
 
 
Natural gas instruments
 
$
(0.9
)
 
Product cost
Foreign currency contracts
 
(2.2
)
 
Interest expense
Income tax expense (benefit)
 
1.0

 
 
 Reclassifications, net of income taxes
 
(2.1
)
 
 
Amortization of defined benefit pension:
 
 

 
 
Amortization of loss
 
$
0.4

 
Product cost
Income tax expense (benefit)
 
(0.1
)
 
 
 Reclassifications, net of income taxes
 
0.3

 
 
Total reclassifications, net of income taxes
 
$
(1.8
)
 
 
Twelve Months Ended December 31, 2018
 
Amount Reclassified from AOCL
 
Line Item Impacted in the Consolidated Statement of Operations
Gains (losses) on cash flow hedges:
 
 
 
 
Natural gas instruments
 
$
0.2

 
Product cost
Foreign currency contracts
 
(3.0
)
 
Interest Expense
Income tax expense (benefit)
 
1.0

 
 
 Reclassifications, net of income taxes
 
(1.8
)
 
 
Amortization of defined benefit pension:
 
 

 
 
Amortization of loss
 
$
0.2

 
Product cost
Income tax expense (benefit)
 
—

 
 
 Reclassifications, net of income taxes
 
0.2

 
 
Total reclassifications, net of income taxes
 
$
(1.6
)