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Share-Based Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Share-Based Compensation
In 2018, QEP's Board and shareholders approved the QEP Resources, Inc. 2018 Long-Term Incentive Plan (LTIP), which replaces the 2010 Long-Term Stock Incentive Plan (LTSIP) and provides for the issuance of up to 10.0 million shares such that the Board may grant long-term incentive compensation. QEP issues restricted share awards, restricted cash awards and restricted share units under its LTSIP or LTIP and issues performance share unit awards under its Cash Incentive Plan (CIP) to certain officers, employees, and non-employee directors. QEP historically issued stock options under its LTSIP. Grants issued prior to May 15, 2018 are under the LTSIP and the grants issued on or after May 15, 2018 are under the LTIP. QEP recognizes the expense over the vesting periods for the stock options, restricted share awards, restricted cash awards, restricted share units and performance share units. There were 2.9 million shares available for future grants under the LTIP at December 31, 2020.

Share-based compensation expense is generally recognized within "General and administrative" expense on the statements of operations and is summarized in the table below.

Year Ended December 31,
2020(1)(2)
2019(3)
2018(4)
(in millions)
Non-cash share-based compensation
Stock options$— $0.4 $1.2 
Restricted share awards12.4 20.4 27.5 
Total non-cash share-based compensation12.4 20.8 28.7 
Cash share-based compensation
Restricted cash awards1.7 — — 
Performance share units1.0 4.3 8.1 
Restricted share units0.1 0.3 0.1 
Total cash share-based compensation2.8 4.6 8.2 
Total share-based compensation expense$15.2 $25.4 $36.9 
__________________________
(1)During the year ended December 31, 2020, the Company incurred $0.4 million of share-based compensation expense related to restricted share awards in which vesting was accelerated in accordance with the Merger Agreement. Refer to Note 1 – Summary of Significant Accounting Policies for more information on the Merger Agreement.
(2)During the year ended December 31, 2020, the Company incurred $0.5 million of share-based compensation expense related to the acceleration of vesting that occurred as part of the restructuring program and is included in the table above. Refer to Note 8 – Restructuring for more information.
(3)During the year ended December 31, 2019, the Company recorded $12.6 million of share-based compensation expense related to the acceleration of vesting that occurred as part of the restructuring program. Of the $12.6 million, $1.5 million was recorded in "Net gain (loss) from asset sales, inclusive of restructuring costs" on the statement of operations, and the remaining $11.1 million is included in the table above. Refer to Note 8 – Restructuring for more information.
(4)During the year ended December 31, 2018, the Company recorded $11.0 million of share-based compensation expense related to the acceleration of vesting that occurred as part of the restructuring program. Of the $11.0 million, $2.2 million was recorded in "Net gain (loss) from asset sales, inclusive of restructuring costs" on the statement of operations, and the remaining $8.8 million is included in the table above. Refer to Note 8 – Restructuring for more information.

Stock Options
QEP used the Black-Scholes-Merton mathematical model to estimate the fair value of stock option awards at the date of grant. Fair value calculations relied upon subjective assumptions used in the mathematical model and may not be representative of future results. The Black-Scholes-Merton model, which was intended for calculating the value of options not traded on an exchange, was historically used by the Company when QEP granted stock options. The Company utilized the "simplified" method to estimate the expected term of the stock options granted as there was limited historical exercise data available in estimating the expected term of the stock options. QEP used a historical volatility method to estimate the fair value of stock options awards and the risk-free interest rate was based on the yield on U.S. Treasury strips with maturities similar to those of the expected term of the stock options. The stock options typically vest in equal installments over three years from the grant date and are exercisable immediately upon vesting through the seventh anniversary of the grant date. To fulfill options exercised, QEP either reissues treasury stock or issues new shares. The Company recognizes forfeitures of stock options as they occur. During the years ended December 31, 2020, 2019 and 2018, QEP did not issue stock options.

Stock option transactions under the terms of the LTSIP are summarized below:
Options OutstandingWeighted-Average Exercise PriceWeighted-Average Remaining Contractual TermAggregate Intrinsic Value
(per share)(in years)(in millions)
Outstanding at December 31, 20191,802,387 $20.87 
Exercised— — 
Cancelled(311,203)30.08 
Outstanding at December 31, 20201,491,184 $18.94 1.77$— 
Options Exercisable at December 31, 20201,491,184 $18.94 1.77$— 
Unvested Options at December 31, 2020— $— 0.00$— 

During the years ended December 31, 2020 and 2019, there were no exercises of stock options. The total intrinsic value (the difference between the market price at the exercise date and the exercise price) of stock options exercised was $0.1 million during the year ended December 31, 2018. The Company recognized $1.1 million and $2.3 million of income tax expense for the years ended December 31, 2020 and 2019, respectively, and no income tax expense for the year ended December 31, 2018. As of December 31, 2020, there was no unrecognized compensation cost related to stock options granted under the LTSIP.

Restricted Share Awards
Restricted share award grants typically vest in equal installments over three years from the grant date. The grant date fair value is determined based on the closing bid price of the Company's common stock on the grant date. The Company recognizes restricted share forfeitures as they occur. The total fair value of restricted share awards that vested during the years ended December 31, 2020, 2019 and 2018, was $4.5 million, $32.5 million and $21.5 million, respectively. The Company recognized $2.5 million and $5.4 million of income tax expense for the years ended December 31, 2020 and 2019, respectively, and no tax impact for the year ended December 31, 2018. The weighted-average grant date fair value of restricted share awards granted was $2.10 per share, $7.72 per share and $9.56 per share for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, $7.0 million of unrecognized compensation cost related to restricted share awards granted under the LTSIP is expected to be recognized over a weighted-average vesting period of 1.93 years.
Transactions involving restricted share awards under the terms of the LTSIP and LTIP are summarized below:
Restricted Share Awards OutstandingWeighted-Average Grant Date Fair Value
(per share)
Unvested balance at December 31, 20192,845,033 $8.67 
Granted5,080,589 2.10 
Vested(2,240,899)7.09 
Forfeited(109,925)4.79 
Unvested balance at December 31, 20205,574,798 $3.39 

Restricted Cash Awards
Beginning in March 2020, QEP issued restricted cash awards under its LTIP to certain employees. Restricted cash award grants vest in equal installments over three years from the grant date. The Company recognizes restricted cash forfeitures as they occur. There were no restricted cash awards granted or outstanding during the year ended December 31, 2019. As of December 31, 2020, $1.6 million of unrecognized compensation expense related to restricted cash awards granted under the LTIP is expected to be recognized over a weighted-average vesting period of 2.25 years.

Transactions involving restricted cash awards under the terms of the LTIP are summarized below:

Restricted Cash Awards Outstanding
Unvested balance at December 31, 2019$— 
Granted3,249,925 
Vested(7,000)
Forfeited(75,250)
Unvested balance at December 31, 2020$3,167,675 

Performance Share Units
The payouts for performance share units are dependent upon the Company's total shareholder return compared to a group of its peers over three years. The awards are denominated in share units and have historically been paid in cash. The Company has the option to settle earned awards in cash or shares of common stock under the Company's LTIP; however, as of December 31, 2020, the Company expects to settle all awards in cash under the CIP. These awards are classified as liabilities and are included within "Other long-term liabilities" on the balance sheets. As these awards are dependent upon the Company's total shareholder return and stock price, they are measured at fair value at the end of each reporting period. The Company paid $0.3 million, $13.0 million and $2.8 million for vested performance share units during the years ended December 31, 2020, 2019 and 2018, respectively. The weighted-average grant date fair value of the performance share units granted during the years ended December 31, 2020, 2019 and 2018, was $2.17, $7.93, and $9.55 per share, respectively. As of December 31, 2020, $2.1 million of unrecognized compensation cost, which represents the unvested portion of the fair market value of performance shares granted, is expected to be recognized over a weighted-average vesting period of 1.91 years.

Transactions involving performance share units under the terms of the CIP are summarized below:
Performance Share Units OutstandingWeighted-Average Grant Date Fair Value
(per share)
Unvested balance at December 31, 2019625,922 $9.04 
Granted1,926,026 2.17 
Vested (96,734)13.06 
Unvested balance at December 31, 20202,455,214 $3.56 
Restricted Share Units
Employees may elect to defer their grants of restricted share awards and these deferred awards are designated as restricted share units. Restricted share units vest over three years and are deferred into the Company's Wrap Plan at the time of grant. These awards are ultimately paid in cash, are classified as liabilities in "Other long-term liabilities" on the balance sheets and are measured at fair value at the end of each reporting period. The weighted-average grant date fair value of the restricted share units was $2.08, $7.87 and $9.55 per share for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, $0.1 million of unrecognized compensation cost, which represents the unvested portion of the fair market value of restricted share units granted, is expected to be recognized over a weighted-average vesting period of 0.83 years.

Transactions involving restricted share units under the terms of the LTSIP and LTIP are summarized below:
Restricted Share Units OutstandingWeighted-Average Grant Date Fair Value
(per share)
Unvested balance at December 31, 201934,393 $8.16 
Granted76,083 2.08 
Vested and paid(26,770)8.20 
Unvested balance at December 31, 202083,706 $2.62