STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2014

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

Schedule of stock-based compensation expense and the related deferred tax benefit recognized in income

The following table reflects the stock-based compensation expense and the related deferred income tax benefit recognized in income for the three and nine months ended September 30:



	Three Months Ended September				Nine Months Ended September 30
(Millions)	2014		2013		2014		2013
Stock options	$	0.4	$	0.5	$	1.2	$	1.4
Performance stock rights	1.1		1.2		10.8		4.4
Restricted share units *	1.5		2.5		7.6		7.8
Nonemployee director deferred stock units	0.2		0.2		0.6		0.7
Total stock-based compensation expense	$	3.2	$	4.4	$	20.2	$	14.3
Deferred income tax benefit	$	1.3	$	1.8	$	8.1	$	5.7


*	The three and nine months ended September 30, 2013, include an insignificant amount related to IES's retail energy business. The three and nine months ended September 30, 2014, do not include any amounts related to IES's retail energy business as the estimated forfeiture rate was adjusted in the third quarter of 2014 to reflect the sale.

Schedule of the assumptions incorporated into the valuation of stock options granted

The following table shows the assumptions incorporated into the valuation model:



		February 2014 Grant
Expected term		8 years
Risk-free interest rate		0.12% – 2.88%
Expected dividend yield		5.28%
Expected volatility		18%

Summary of stock option activity and information related to outstanding and exercisable stock options

A summary of stock option activity for the nine months ended September 30, 2014, and information related to outstanding and exercisable stock options at September 30, 2014, is presented below:



	Stock Options		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (Millions)
Outstanding at December 31, 2013	1,550,374		$	50.93
Granted	264,332		55.23
Exercised	(411,214	)	48.63
Forfeited	(2,542	)	55.23
Outstanding at September 30, 2014	1,400,950		$	52.41	6.6	$	17.4
Exercisable at September 30, 2014	714,317		$	50.33	4.9	$	10.3

Schedule of assumptions incorporated into the valuation models for performance stock rights

The table below reflects the assumptions used in the valuation of the outstanding grants at September 30:



		2014
Risk-free interest rate		0.06% – 0.60%
Expected dividend yield		5.28% – 5.33%
Expected volatility		17% – 23%

Summary of the activity related to restricted share unit awards (equity and liability awards)

A summary of the activity related to all restricted share unit awards (equity and liability awards) for the nine months ended September 30, 2014, is presented below:



	Restricted Share Unit Awards		Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2013	511,301		$	52.24
Granted	214,953		55.23
Dividend equivalents	17,317		54.45
Vested and released	(208,873	)	49.76
Forfeited	(16,730	)	54.66
Outstanding at September 30, 2014 *	517,968		$	54.48

* Includes 94,267 restricted share units that were forfeited on November 1, 2014 related to the sale of IES's retail energy business. See Note 4, Dispositions, for more information on the sale.

Performance Stock Rights Accounted For As Equity Awards

Summary of the activity related to performance stock rights

A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as equity awards is presented below:



	Performance Stock Rights		Weighted-Average Fair Value ⁽²⁾
Outstanding at December 31, 2013	85,749		$	46.62
Granted	21,146		44.28
Award modifications ⁽¹⁾	64,612		85.09
Adjustment for shares not distributed	(45,748	)	43.29
Forfeited	(203	)	44.28
Outstanding at September 30, 2014	125,556		$	67.24

⁽¹⁾

Six months prior to the end of the performance period, employees can no longer change their election to defer the value of their performance stock rights into the deferred compensation plan. As a result, any awards not elected for deferral at this point in the performance period will be settled in our common stock. This changes the classification of these awards from a liability award to an equity award. The change in classification is accounted for as an award modification.


⁽²⁾	Reflects the weighted-average fair value used to measure equity awards. Equity awards are measured using the grant date fair value or the fair value on the modification date.

Performance Stock Rights Accounted For As Liability Awards

Summary of the activity related to performance stock rights

A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as liability awards is presented below:



	Performance Stock Rights
Outstanding at December 31, 2013	198,904
Granted	84,529
Award modifications *	(64,612	)
Adjustment for shares not distributed	(39,001	)
Forfeited	(813	)
Outstanding at September 30, 2014	179,007