Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income:

	Three months ended March 31,
	2017			2016
	(In millions)
Total stock-based compensation expense:
Equity classified awards expense	$	6.2		$	3.2
Liability classified awards expense	0.2			0.8
Total pre-tax stock-based compensation expense	6.4			4.0
Book income tax benefit	(2.4		)	(1.5		)
Total stock-based compensation expense, net of tax	$	4.0		$	2.5

As of March 31, 2017, total unrecognized compensation expense of $21.0 million related to restricted stock and restricted stock units and $5.7 million related to stock options are expected to be recognized over a weighted average period of 1.84 years years for restricted stock and restricted stock units and 1.87 years for stock options.

Equity Classified Awards - Stock Options

The estimated fair value of the stock options granted during the three months ended March 31, 2017 was calculated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	1.9	%
Weighted average historical volatility	22.9	%
Dividend yield	7.3	%
Expected years until exercise	4.5
Weighted average fair value of options granted	$4.31

Stock option balances as of March 31, 2017 and related activity for the three months ended March 31, 2017 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2016	701,134		$	80.04
Granted	537,030		53.42
Exercised	(34,916	)	42.22
Forfeited	(23,675	)	93.97
Outstanding at March 31, 2017	1,179,573		68.76		6.7	$	1.2
Vested at March 31, 2017 and Expected to Vest	1,059,576		69.98		6.4	$	1.1
Exercisable at March 31, 2017	539,091		$	79.16	3.5	$	0.7

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the first quarter of 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2017. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of March 31, 2017 and activity related to restricted stock and restricted stock units for the three months ended March 31, 2017 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value		Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016	235,472		$	92.91	34,058		$	93.95
Granted	159,974		54.58		22,144		54.97
Released	(78,875	)	88.97		(12,199	)	81.57
Forfeited	(17,889	)	94.73		—		—
Outstanding at March 31, 2017	298,682		$	73.31	44,003		$	78.15

Liability Classified Awards - Long-Term Incentive Awards

The Company has granted cash long-term incentive awards (“LTIP awards”) to certain employees. Annual LTIP awards vest over a three-year period and are determined using a multiplier from 0% to 200% of the target award based on the total stockholder return of DineEquity common stock compared to the total stockholder returns of a peer group of companies. Although LTIP awards are only paid in cash, since the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are classified as liabilities. For the three months ended March 31, 2017 and 2016, expenses of $0.2 million and $0.8 million, respectively, were included in total stock-based compensation expense related to LTIP awards. At March 31, 2017 and December 31, 2016, liabilities of $1.4 million and $1.2 million, respectively, related to LTIP awards were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets.