Share-Based Compensation

At December 31, 2017, total compensation cost related to nonvested awards not yet recognized was approximately $32,800,000. The weighted-average period over which this compensation cost is expected to be recognized is approximately three years. The aggregate intrinsic value for SARs and RSUs outstanding at December 31, 2017 and 2016 was approximately $95,400,000 and $104,200,000, respectively. The aggregate intrinsic value for SARs and RSUs vested totaled approximately $52,900,000 and $62,000,000 at December 31, 2017 and 2016, respectively. At December 31, 2017, the weighted-average contractual life for outstanding and exercisable SARs and RSUs was six and five years, respectively. Share-based compensation costs of $16,892,000, $19,719,000, and $17,717,000, were recorded for the years ended December 31, 2017, 2016, and 2015, respectively. The total income tax benefits recognized in the consolidated statements of income and comprehensive income for share-based compensation arrangements were approximately $4,600,000, $7,900,000, and $7,100,000 for 2017, 2016, and 2015, respectively. There have been no modifications to valuation methodologies or methods during the years ended December 31, 2017, 2016, or 2015.

For the years ended December 31, 2017, 2016, and 2015, the fair values for SARs granted were estimated using a Black-Scholes option pricing model with the following weighted-average assumptions, respectively: risk-free interest rate of 2.3%, 1.6%, and 2.0%; dividend yield of 2.8%, 2.7%, and 2.6%; annual historical volatility factor of the expected market price of the Company’s common stock of 19% for each of the three years and an average expected life of approximately six years. The fair value of RSUs is based on the price of the Company’s stock on the date of grant. The total fair value of shares vested during the years ended December 31, 2017, 2016, and 2015 were $15,500,000, $18,200,000, and $15,200,000, respectively.

A summary of the Company’s share-based compensation activity and related information is as follows:



	2017
	Shares (1)		Weighted- Average Exercise Price (2)
	(In Thousands)
Outstanding at beginning of year	3,878		$	79
Granted	917		90
Exercised	(348	)	61
Forfeited	(247	)	92
Outstanding at end of year (3)	4,200		$	82
Exercisable at end of year	2,514		$	77
Shares available for future grants	8,368


(1)	Shares include Restricted Stock Units (RSUs).


(2)	The weighted-average exercise price excludes RSUs.


(3)	The exercise prices for SARs outstanding as of December 31, 2017 ranged from approximately $42 to $100. The weighted-average remaining contractual life of all SARs outstanding is approximately six years.

The weighted-average grant date fair value of SARs granted during the years 2017, 2016, and 2015 was $13.89, $13.52, and $13.53, respectively. The aggregate intrinsic value of SARs and RSUs exercised during the years ended December 31, 2017, 2016, and 2015 was $16,800,000, $48,200,000, and $30,100,000, respectively.

In 2017, the Company granted approximately 746,000 SARs and 171,000 RSUs. In 2016, the Company granted approximately 724,000 SARs and 170,000 RSUs. In 2015, the Company granted approximately 711,000 SARs and 176,000 RSUs.

A summary of the Company’s nonvested share awards activity is as follows:



Nonvested Share Awards (RSUs)	Shares		Weighted- Average Grant Date Fair Value
	(In Thousands)
Nonvested at January 1, 2017	408		$	92
Granted	171		90
Vested	(80	)	84
Forfeited	(93	)	88
Nonvested at December 31, 2017	406		$	91

Following the adoption of ASU 2016-09, for the year ended December 31, 2017, approximately $3,134,000 of excess tax benefits from share-based compensation were presented as an operating activity in the statement of cash flows. Prior to the adoption of ASU 2016-09, for the years ended December 31, 2016, and 2015 approximately $12,021,000, and $7,024,000, respectively, of excess tax benefits were classified as operating cash outflows and financing cash inflows.