STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2011

Share-based Compensation [Abstract]

Stock Based Compensation Plans

STOCK-BASED COMPENSATION PLANS

The Company has stock awards outstanding under a number of long-term incentive equity plans, one of which actively provides for the grant of stock awards to directors, officers and employees of the Company and its subsidiaries. Compensation expense is recorded over the shorter of the vesting period or the period between the grant date and the date the employee becomes retirement-eligible as defined in the applicable plan. All stock-based compensation expense is recorded in wages and benefits in the condensed consolidated statements of operations.

Stock Options

During the nine months ended September 30, 2011, the Company granted 72,740 options with a weighted-average grant-date fair value of $32.99 per share. During the same period in the prior year, the Company granted 129,970 options with a weighted-average grant-date fair value of $18.05 per share.

The Company recorded stock-based compensation expense related to stock options of $0.5 million and $0.7 million for the three months ended September 30, 2011 and 2010 respectively. The Company recorded expense of $2.5 million and $3.5 million for the nine months ended September 30, 2011 and 2010, respectively. As of September 30, 2011, $2.3 million of compensation cost associated with unvested stock option awards attributable to future service had not yet been recognized. This amount will be recognized as expense over a weighted-average period of 1.9 years.

As of September 30, 2011, options to purchase 743,725 shares of common stock were outstanding with a weighted-average exercise price of $33.58. Of that total, 266,977 were exercisable at a weighted-average exercise price of $33.94.

Restricted Stock Awards

During the nine months ended September 30, 2011, the Company awarded 79,216 restricted stock units (RSUs) to certain employees, with a weighted-average grant date fair value of $61.15. This amount reflects the value of the total RSU awards at the grant date based on the closing price of the Company's common stock.

The Company recorded stock-based compensation expense related to RSUs of $1.0 million and $0.7 million for the three month period ended September 30, 2011 and 2010, respectively, and $4.8 million and $4.5 million for the nine months ended September 30, 2011 and 2010, respectively.

As of September 30, 2011$4.9 million of compensation cost associated with unvested RSUs attributable to future service had not yet been recognized. This amount will be recognized as expense over a weighted-average period of 1.8 years.

Performance Stock Awards

From time to time, the Company issues performance stock unit awards (PSUs) to certain executives. PSUs vest based on performance or market performance measures.

Currently outstanding PSUs were issued in 2010 and 2011. There are several tranches of PSUs that vest based on differing performance conditions including a market condition tied to the Company's total shareholder return relative to an airline peer group, and based on certain performance goals established by the Compensation Committee of the Board of Directors. The total grant-date fair value of PSUs issued during the nine months ended September 30, 2011 was $2.3 million.

The Company recorded $0.5 million and $0.4 million of compensation expense related to PSUs in the three months ended September 30, 2011 and 2010, respectively, and $1.5 million and $2.1 million for the nine months ended September 30, 2011 and 2010, respectively.

As of September 30, 2011$3.1 million of compensation cost associated with unvested PSUs attributable to future performance had not yet been recognized. This amount will be recognized as expense over a weighted-average period of 1.8 years.

Deferred Stock Awards

In the second quarter of 2011, the Company awarded 4,208 Deferred Stock Unit awards (DSUs) to members of its Board of Directors as a portion of their retainers. The underlying common shares are issued upon retirement from the Board, but require no future service period. As a result, the entire intrinsic value of the awards on the date of grant was expensed in the quarter granted. The total amount of compensation expense recorded in the first nine months of 2011 was $0.3 million.

The Company awarded 6,328 DSUs and recorded compensation expense of $0.3 million in the first nine months of 2010.

Employee Stock Purchase Plan

Compensation expense recognized under the Employee Stock Purchase Plan was $0.2 million and $0.1 million for the three months ended September 30, 2011 and 2010, respectively, and was $0.4 million and $0.2 million for the nine months ended September 30, 2011 and 2010, respectively.

Summary of Stock-Based Compensation

The table below summarizes the components of total stock-based compensation for the three and nine months ended September 30, 2011 (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Stock options	$	0.5	$	0.7	$	2.5	$	3.5
Restricted stock units	1.0		0.7		4.8		4.5
Performance share units	0.5		0.4		1.5		2.1
Deferred stock awards	—		—		0.3		0.3
Employee stock purchase plan	0.2		0.1		0.4		0.2
Total stock-based compensation	$	2.2	$	1.9	$	9.5	$	10.6