Stock-based compensation expense of awards issued under the Company’s incentive plans, and the income tax benefit of awards vested and exercised, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2025		2024		2025		2024

Restricted stock units - employees and non-employee directors	$	13	$	12	$	24	$	21
Restricted stock awards	—		2		—		3
Performance share awards	1		2		6		5


Total stock-based compensation expense	$	14	$	16	$	30	$	29
Income tax benefit	$	3	$	—	$	17	$	—

Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of stock-based compensation awards and the applicable award terms.

During the six months ended June 30, 2025, the Company granted 671,361 restricted stock units to employees of the Company with a weighted average grant date value of $28.48 per unit. The fair value of restricted stock unit grants is based on the closing stock price on the grant date. Restricted stock units generally vest at the end of a three-year service period. The Company assumed a zero to five percent annual forfeiture rate for purposes of recognizing stock-based compensation expense for awards granted in 2025 based on the Company’s actual forfeiture history and expectations for this type of award.

During the six months ended June 30, 2025, 1,166,142 restricted stock units granted in 2022 vested. The weighted average grant date value was $24.14 per unit.

During the six months ended June 30, 2025, the Company granted 83,637 restricted stock units, with a weighted-average grant date value of $22.60 per unit, to the Company’s non-employee directors. The fair value of these units is measured based on the closing stock price on grant date. These units will vest on the earlier of April 2026 or upon the director’s separation from the Company. Accordingly, the Company recognized this compensation expense immediately.

During the six months ended June 30, 2025, 49,861 restricted stock units granted in 2024 were issued to the Company’s non-employee directors and 76,478 restricted stock units granted and vested in periods from 2016 through 2021 were issued upon the retirement of certain non-employee directors following the Company’s 2025 annual meeting of stockholders. The weighted average grant date value was $23.50 per unit for all awards issued in 2025.

Total Shareholder Return (“TSR”) Performance Share Awards. During the six months ended June 30, 2025, the Company granted 579,476 TSR Performance Share Awards, which are earned or not earned, based on the comparative performance of the Company’s common stock measured against a predetermined group of companies in the Company’s peer group and certain industry-related indices over a three-year performance period, which commenced on February 1, 2025 and ends on January 31, 2028.

These awards have both an equity and liability component, with the right to receive up to the first 100 percent of the award in shares of common stock and the right to receive up to an additional 100 percent of the value of the award in excess of the equity component in cash. These awards also include a feature that will reduce the potential cash component of the award if the actual performance is negative over the three-year period and the base calculation indicates an above-target payout. The equity portion of these awards is valued on the grant date and is not marked-to-market, while the liability portion of the awards

is valued as of the end of each reporting period on a mark-to-market basis. The Company calculates the fair value of the equity and liability portions of the awards using a Monte Carlo simulation model.

The Company assumed a zero percent annual forfeiture rate for purposes of recognizing stock-based compensation expense for these awards based on the Company’s actual forfeiture history and expectations for this type of award.

The following assumptions were used to determine the grant date fair value of the equity component and the period-end fair value of the liability component of the TSR Performance Share Awards:


	Grant Date
	February 19, 2025			June 30, 2025
Fair value per performance share award	$	21.49		$5.97 - $6.19
Assumptions:
Stock price volatility	33.8		%	27.4% - 33.9%
Risk-free rate of return	4.25		%	3.66% - 4.19%

The stock price volatility was calculated using historical closing stock price data for the Company for the period associated with the expected term through the grant date of each award. The risk-free rate of return percentages are based on the continuously compounded equivalent of the U.S. Treasury within the expected term as measured on the grant date.

In January 2025, the performance period ended for the TSR Performance Share Awards that were granted in 2022, and 1,103,157 shares with a grant date fair value of $20 million vested based on the Company’s ranking relative to a predetermined peer group. Cash payments associated with these awards of approximately $1 million were also made in February 2025. The calculation of the award payout was certified by the Compensation Committee of the Board of Directors on February 10, 2025.