Share-Based Compensation Plans

12 Months Ended

Dec. 31, 2018

SHARE-BASED COMPENSATION PLANS

All share-based compensation for employees and directors is granted under the 2013 Long-Term Incentive Plan, as amended (the "Plan"). The Plan has been approved by our shareholders and provides for the granting of awards to our employees and directors. The purpose of the Plan is to attract and retain individuals of exceptional talent and encourage these individuals to acquire a vested interest in our success and prosperity. The awards that may be granted under this program include non-qualified stock options, restricted stock, restricted share units, and RTSR units. Restricted shares are generally service-based, requiring a certain length of service before vesting occurs, while restricted share units can be either service-based or performance-based. Performance-based restricted share units require a certain length of service until vesting; however, they contain an additional performance feature, which can vary the amount of shares ultimately paid out based on certain performance criteria specified in the Plan. RTSR performance share units are subject to a market condition. Awards granted under the Plan vest and may be exercised and/or sold from one to ten years after the date of grant based on a vesting schedule. As of December 31, 2018, there were 2.8 million shares available to be granted.

Share-based compensation expense was as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	37.7	$	43.8	$	23.0

As of December 31, 2018, unrecognized share-based compensation expense was $48.3 million, and the weighted-average period over which the expense is expected to be recognized was approximately 1.9 years. Proceeds from the exercise of stock options are credited to ordinary shares.

Stock Options

A summary of activity related to stock options is presented below (options in thousands):



	Number of Options		Weighted-Average Exercise Price Per Share		Weighted- Average Remaining Term in Years	Aggregate Intrinsic Value
Options outstanding at December 31, 2016	749		$	108.40
Granted	439		$	70.34
Exercised	(31	)	$	24.75
Forfeited or expired	(85	)	$	118.47
Options outstanding at December 31, 2017	1,072		$	94.90	6.9	$	10.9
Granted	521		$	82.43
Exercised	(33	)	$	42.06
Forfeited or expired	(26	)	$	97.82
Options outstanding December 31, 2018	1,534		$	91.56	6.9	$	0.1
Options exercisable	764		$	101.27	5.6	$	0.1
Options expected to vest	736		$	82.12	8.1	$	0.0

The aggregate intrinsic value for options exercised was as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	1.1	$	1.7	$	5.2

The weighted-average fair value per share at the grant date for options granted was as follows:



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	24.43	$	19.50	$	33.53

The fair value was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:



	Year Ended
	December 31, 2018		December 31, 2017		December 31, 2016
Dividend yield	0.8	%	0.9	%	0.5	%
Volatility, as a percent	31.2	%	30.0	%	27.6	%
Risk-free interest rate	2.8	%	1.8	%	1.3	%
Expected life in years	5.6		5.4		5.5

The valuation model utilizes historical volatility. The risk-free interest rate is based on the yield of U.S. government securities with a maturity date that coincides with the expected term of the option. The expected life in years is estimated based on past exercise behavior of employees.

Non-Vested Service-Based Restricted Share Units

A summary of activity related to non-vested service-based restricted share units is presented below (units in thousands):



	Number of Non-vested Service- Based Share Units		Weighted- Average Grant Date Fair Value Per Share		Weighted- Average Remaining Term in Years	Aggregate Intrinsic Value
Non-vested service-based share units outstanding at December 31, 2016	468		$	137.53
Granted	298		$	70.55
Vested	(112	)	$	128.86
Forfeited	(55	)	$	120.97
Non-vested service-based share units outstanding at December 31, 2017	599		$	107.26	1.5	$	52.2
Granted	385		$	81.51
Vested	(204	)	$	121.10
Forfeited	(52	)	$	107.31
Non-vested service-based share units outstanding at December 31, 2018	728		$	89.47	1.4	$	28.2

The weighted-average fair value per share at the date of grant for service-based restricted share units granted was as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	81.51	$	70.55	$	113.26

The total fair value of service-based restricted share units that vested was as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	24.6	$	14.5	$	12.6

Non-Vested Performance-Based Restricted Share Units

A summary of activity related to non-vested performance-based restricted share units is presented below (units in thousands):



	Number of Non-vested Performance- Based Share Units		Weighted- Average Grant Date Fair Value Per Share		Weighted- Average Remaining Term in Years	Aggregate Intrinsic Value
Non-vested performance-based share units outstanding at December 31, 2016	177		$	138.29
Granted	191		$	70.34
Vested	(27	)	$	142.18
Forfeited	(38	)	$	130.34
Non-vested performance-based share units outstanding at December 31, 2017	303		$	93.65	2.0	$	26.5
Granted	207		$	85.01
Vested	(13	)	$	176.59
Forfeited	(55	)	$	85.94
Non-vested performance-based share units outstanding at December 31, 2018	442		$	86.61	1.5	$	17.2

The weighted-average fair value of performance-based restricted share units can fluctuate depending upon the success or failure of the achievement of performance criteria as set forth in the Plan. The weighted-average fair value per share at the date of grant for performance-based restricted share units granted was as follows:



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	85.01	$	70.34	$	126.37

The total fair value of performance-based restricted share units that vested was as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	2.4	$	3.8	$	10.4

Non-vested Relative Total Shareholder Return Performance Share Units

The fair value of the RTSR performance share units is determined using the Monte Carlo pricing model as the number of shares to be awarded is subject to a market condition. The valuation model considers a range of possible outcomes, and compensation cost is recognized regardless of whether the market condition is actually satisfied.

The assumptions used in estimating the fair value of the RTSR performance share units granted during each year were as follows:



	Year Ended
	December 31, 2018		December 31, 2017
Dividend yield	0.9	%	0.9	%
Volatility, as a percent	35.3	%	36.1	%
Risk-free interest rate	2.4	%	1.4	%
Expected life in years	2.8		2.6

A summary of activity related to non-vested RTSR performance share units is presented below (units in thousands):



	Number of Non-vested RTSR Performance Share Units		Weighted- Average Grant Date Fair Value Per Share		Weighted- Average Remaining Term in Years*	Aggregate Intrinsic Value
Non-vested RTSR performance share units outstanding at December 31, 2016	—		$	—
Granted	39		$	64.82
Non-vested RTSR performance share units outstanding at December 31, 2017	39		$	64.82	2.0	$	3.4
Granted	38		$	101.13
Forfeited	(15	)	$	101.13
Non-vested RTSR performance share units outstanding at December 31, 2018	62		$	78.35	1.7	$	2.4

* Midpoint used in calculation.

The weighted-average fair value per share at the date of grant for RTSR performance share units granted was as follows:

Year Ended

December 31,
2018

December 31,
2017