XML 72 R47.htm IDEA: XBRL DOCUMENT v3.8.0.1
Share-Based Compensation Plans (Tables)
 12 Months Ended
Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of share-based compensation expense
Share-based compensation expense recorded by the Company was as follows:
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
 
 
(millions)
2013 Executive Performance Incentive Program
 
$
—

 
$
—

 
$
6.8

2014 Executive Performance Incentive Program
 
—

 
9.5

 
12.9

2015 Executive Performance Incentive Program
 
5.4

 
12.4

 
12.1

2016 Incentive Performance Share Unit Program
 
13.1

 
7.2

 
—

2017 Incentive Performance Share Unit Program
 
5.0

 
—

 
—

2014 EQT Value Driver Award Program
 
—

 
—

 
1.1

2014 EQM Value Driver Award Program
 
—

 
—

 
0.6

2015 EQT Value Driver Award Program
 
—

 
3.2

 
14.6

2016 EQT Value Driver Performance Share Unit Award Program
 
3.4

 
15.7

 
—

2017 EQT Value Driver Performance Share Unit Award Program
 
10.8

 
—

 
—

Restricted stock awards
 
87.1

 
9.4

 
7.0

Non-qualified stock options
 
2.6

 
3.1

 
1.9

Other programs, including non-employee director awards
 
1.0

 
5.5

 
(2.3
)
Total share-based compensation expense
 
$
128.4

 
$
66.0

 
$
54.7
Schedule of details of award types
More detailed information about each award is set forth in the table below:

EQT VDPSU Program
Settled In
Accounting Treatment
Fair Value per Unit1
Vested/Payment Date
Number of awards (including accrued dividends) or cash (millions) paid
Unvested/Expected Payment Date
Awards Outstanding (including accrued dividends) as of December 31, 20172
2014
Cash
Liability
$
75.70

February 2015
$
14.2

N/A
N/A

$
52.13

February 2016
$
9.4

2015
Stock
Equity
$
75.70

February 2016
222,751

N/A

N/A

 
 
 
$
75.70

February 2017
208,567

N/A
N/A

20163
Cash
Liability
$
65.40

February 2017
$
21.3

N/A

N/A

$
56.92

N/A

N/A

Second tranche first quarter of 2018
298,480

20174
Cash
Liability
$
56.92

N/A
N/A

First tranche first quarter of 2018
245,913

N/A

N/A
N/A

Second tranche first quarter of 2019
246,297


1 For equity awards, the fair value per unit is equal to the Company's closing common stock price on the business day prior to the
grant date. For liability awards, the fair value per unit is equal to the Company's common stock price on the measurement date.
2 As of January 1, 2017, 651,328 awards including accrued dividends were outstanding under the 2016 EQT VDPSU Program.
3 In addition to the $21.3 million in awards paid in February 2017, $0.2 million in awards were paid in 2017 in accordance with employee separation agreements.
4 The total liability recorded for the 2017 EQT VDPSU Program was $21.0 million as of December 31, 2017.
More detailed information about each award is set forth in the table below:

Incentive PSU Program
Settled In
Accounting Treatment
Fair Value1
Risk Free Rate
Vested/Payment Date
Awards Paid
Value
(in millions)
Unvested/Expected Payment Date2
Awards Outstanding as of December 31, 20173
2013
Stock
Equity
$
140.00

0.36
%
February 2016
261,073

$
36.6

N/A
N/A

2014
Stock
Equity
$
189.68

0.78
%
February 2017
238,060

$
45.2

N/A
N/A

2015
Stock
Equity
$
141.11

1.10
%
N/A
N/A

N/A

First Quarter of 2018
306,407

20164
Stock
Equity
$
96.30

1.31
%
N/A
N/A

N/A

First Quarter of 2019
447,145

20175
Stock
Equity
$
120.60

1.47
%
N/A
N/A

N/A

First Quarter of 2020
79,070

20176
Cash
Liability
$
103.70

1.88
%
N/A
N/A

N/A

First Quarter of 2020
117,530

 
1 Grant date fair value determined using a Monte Carlo simulation for equity awards. Fair value determined using a Monte Carlo simulation as of the measurement date for liability awards. For unvested Incentive PSU Programs the grant date fair value for equity awards and the measurement date fair value for liability awards is as of December 31, 2017. The Company recorded compensation expense as of December 31, 2017 using the grant date fair value for equity awards and the measurement date fair value for liability awards, each computed for the outcome which management estimated to be most probable.
2 Vesting of the units will occur upon payment, following the expiration of the performance period subject to continued service through such date.
3 Represents the number of outstanding units as of December 31, 2017 adjusted for forfeitures.
4 As of January 1, 2017, a total of 482,030 units were outstanding under the 2016 Incentive PSU Program. Adjusting for 34,885 forfeitures, there were 447,145 outstanding units as of December 31, 2017.
5 A total of 90,580 units were granted under the 2017 Incentive PSU Program - Equity in 2017 and no additional units may be granted. Adjusting for 11,510 forfeitures, there were 79,070 outstanding units as of December 31, 2017.
6 A total of 133,000 units were granted under the 2017 Incentive PSU Program - Liability in 2017 and no additional units may be granted. Adjusting for 15,470 forfeitures, there were 117,530 outstanding units as of December 31, 2017.
Schedule of employee service share-based compensation, allocation of recognized period costs
The following table sets forth the total compensation costs capitalized related to each of the VDPSU Programs:
 
 
For the Years Ended December 31,
 
 
(millions)
Award
 
2017
 
2016
 
2015
2014 EQT VDPSU Program
 
$
—

 
$
—

 
$
1.3

2015 EQT VDPSU Program
 
—

 
4.1

 
10.9

2016 EQT VDPSU Program
 
7.0

 
16.3

 
—

2017 EQT VDPSU Program
 
$
10.3

 
$
—

 
$
—

The following table sets forth the total compensation costs capitalized related to each of the Incentive PSU Programs:

 
 
For the Years Ended December 31,
 
 
(millions)
Award
 
2017
 
2016
 
2015
2013 Incentive PSU Program
 
$
—

 
$
—

 
$
4.4

2014 Incentive PSU Program
 
—

 
4.2

 
4.9

2015 Incentive PSU Program
 
2.2

 
4.9

 
4.9

2016 Incentive PSU Program
 
4.4

 
3.3

 
—

2017 Incentive PSU Program (liability only)
 
$
1.7

 
$
—

 
$
—
Summary of restricted stock awards activity
A summary of restricted stock equity award activity as of December 31, 2017, and changes during the year then ended, is presented below:
Restricted Stock
 
Non-
Vested
Shares
 
Weighted
Average
Fair Value
 
Aggregate
Fair Value
Outstanding at January 1, 2017
 
224,340

 
$
81.61

 
$
18,309,538

Granted
 
2,375,584

 
65.12

 
154,690,670

Vested
 
(1,854,549
)
 
66.31

 
(122,983,162
)
Forfeited
 
(15,875
)
 
78.12

 
(1,240,174
)
Outstanding at December 31, 2017
 
729,500

 
$
66.86

 
$
48,776,872
Non-qualified stock options, assumptions used to value share-based compensation
The expected term represents the period of time that options granted are expected to be outstanding based on historical option exercise experience.
 
 
For the Years Ended December 31,
 
 
2017 1
 
2016 1
 
2015
Risk-free interest rate
 
1.95
%
 
1.67
%
 
1.61
%
Dividend yield
 
0.18
%
 
0.16
%
 
0.12
%
Volatility factor
 
27.45
%
 
28.59
%
 
26.80
%
Expected term
 
5 years

 
5 years

 
5 years

The fair value is estimated using a Monte Carlo simulation valuation method with the following weighted average assumptions:
 
For the Years Ended December 31,
 
 
2017
 
2017
 
2016
 
2015
 
2014
 
2013
 
 
Liability2
 
Equity

 
Equity

 
Equity

 
Equity

 
Equity

Risk-free rate
 
1.88
%
 
1.47
%
 
1.31
%
 
1.10
%
 
0.78
%
 
0.36
%
Dividend Yield1
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

Volatility factor
 
33.01
%
 
32.30
%
 
28.43
%
 
27.45
%
 
31.38
%
 
32.97
%
Expected term2
 
2 years

 
3 years

 
3 years

 
3 years

 
3 years

 
3 years

 
 
 
 
 
 
 
 
 
 
 
 
 
1 Dividends paid from the beginning of the Performance Period will be cumulatively added as additional shares of common stock.
2 Information shown for the valuation of the liability plan is as of measurement date.
Summary of option activity
A summary of option activity as of December 31, 2017, and changes during the year then ended, is presented below:
Non-qualified Stock Options
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2017
 
1,174,200

 
$
60.99

 
 
 
 
Granted
 
153,700

 
63.97

 
 
 
 
Exercised
 
(158,700
)
 
44.84

 
 
 
 
Forfeited
 
(40,000
)
 
67.91

 
 
 
 
Expired
 
—

 
—

 
 
 
 
Outstanding at December 31, 2017
 
1,129,200

 
$
63.42

 
6.25 years
 
$
1,428,439

Exercisable at December 31, 2017
 
691,100

 
$
63.92

 
5.08 years
 
$
668,266

 
 
For the Years Ended December 31,
 
 
2017 1
 
2016 1
 
2015
Number of Options Granted
 
153,700

 
228,500

 
158,200

Weighted Average Grant Date Fair Value
 
$
17.47

 
$
15.10

 
$
19.90

Total Intrinsic Value of Options Exercised (millions)
 
$
1.7

 
$
3.5

 
$
15.1


1 There were two grant dates for the 2017 and 2016 options. Amounts represent weighted average.