Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

The Company measures compensation cost for all stock awards at fair value on the date of grant and recognizes compensation cost, net of estimated forfeitures, over the requisite service period for awards expected to vest. The Company recognized $6.8 million and $7.0 million of pretax stock-based compensation expense during the three months ended March 31, 2015 and 2014, respectively.

The following table summarizes the changes in the number of shares of common stock underlying outstanding stock options for the three months ended March 31, 2015 (in millions, except weighted-average exercise prices):



	Shares		Weighted-Average Exercise Price		Exercisable at Period End	Aggregate Intrinsic Value Exercisable
Outstanding at December 31, 2014	2.6		$	19	2.6	$	49.1
Exercised	(0.5	)	24
Forfeited / expired	—		22
Outstanding at March 31, 2015	2.1		$	18	2.1	$	43.2

The following table summarizes the changes in the number of outstanding restricted stock units for the three months ended March 31, 2015 (shares in millions):



	Restricted Stock Units		Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2014	3.7		$	26
Granted	0.9		40
Vested	(1.1	)	20
Forfeited	(0.2	)	28
Outstanding at March 31, 2015	3.3		$	31

During the three months ended March 31, 2015, the Company awarded 0.6 million performance stock units which entitle recipients to shares of the Company’s stock at the end of a three-year vesting period, if specified performance or market conditions are achieved (“PSUs”). The PSUs entitle recipients to shares of common stock equal to 0% up to 200% of the number of units granted at the vesting date depending on the level of achievement of the specified performance, market and service conditions. As of March 31, 2015, 1.8 million PSUs were outstanding, and based on performance through March 31, 2015, recipients of PSUs would be entitled to approximately 2.2 million shares at the vesting date. The PSUs are included in the preceding table as if the participants earn shares equal to 100% of the units granted.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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