Equity-Based Compensation

3 Months Ended

Mar. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-Based Compensation

NOTE 11. EQUITY-BASED COMPENSATION

We issue time-vesting restricted stock awards (“RSAs”), time-vesting restricted stock units (“RSUs), and performance-based restricted stock units (“PSUs”).

During the three months ended March 31, 2017 and 2016, we recognized compensation expense of $3.9 million and $2.5 million, respectively, excluding related taxes. Unrecognized compensation expense as of March 31, 2017 was $27.3 million, which is expected to be recognized over a weighted-average period of 1.6 years.

As of March 31, 2017, there were 10.5 million shares of common stock available for future issuance under our Amended and Restated 2014 Omnibus Incentive Plan, including shares issuable pursuant to the units granted under our restricted stock unit awards.

RSAs — During the three months ended March 31, 2017, we issued 0.7 million RSAs with a weighted average grant date fair value of $13.74 per share, which generally vest in equal annual installments over three years from the date of grant.

PSUs — During the three months ended March 31, 2017, we issued PSUs that would result in 0.4 million shares being issued at target value to certain of our employees. The performance period for PSUs is generally three years.  The calculation of the value of the units granted during the three months ended March 31, 2017 is based solely on our total shareholder return (“TSR”) relative to the Relative Shareholder Return. The number of shares of common stock issued in exchange for each PSU at the end of the performance period is determined based on defined target amounts for Relative Shareholder Return. Possible payout multiples range from 33% of target, which represents the threshold and below which no payout is given, and 200% of target, which represents the maximum payout. Vested PSUs are settled with shares of our common stock.

The weighted average grant date fair value of the PSUs granted during the three months ended March 31, 2017 was $15.79 per unit, which was determined using a Monte Carlo simulation valuation model with the following assumptions:

Expected volatility (1)	27.96	%
Dividend yield (2)	—	%
Risk-free rate (3)	1.54	%
Expected term (in years) (4)	2.82

⁽¹⁾ Expected volatility is calculated as the average of the long-term historical volatility based on the peer companies and our implied volatility.

⁽²⁾ At the time of the PSU grant, we had no foreseeable plans to pay dividends during the expected term of these performance shares.

⁽³⁾ Based on the yields of U.S. Department of Treasury instruments with similar expected lives.

⁽⁴⁾ As of the grant date.