Stock-Based Compensation

9 Months Ended

Sep. 30, 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 $7.9 million and $6.8 million of pretax stock-based compensation expense during the three months ended September 30, 2015 and 2014, respectively, and $22.0 million and $21.3 million during the nine months ended September 30, 2015 and 2014, respectively.

The following table summarizes the changes in the number of shares of common stock underlying outstanding stock options for the nine months ended September 30, 2015 (in millions, except weighted-average exercise prices):



	Options Outstanding and Exercisable		Weighted-Average Exercise Price		Aggregate Intrinsic Value Exercisable
Outstanding at December 31, 2014	2.6		$	19	$	49.1
Exercised	(0.9	)	20
Outstanding at September 30, 2015	1.7		$	18	$	34.6

The following table summarizes the changes in the number of outstanding restricted stock units for the nine months ended September 30, 2015 (shares in millions):



	Restricted Stock Units		Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2014	3.7		$	26
Granted	1.0		40
Vested	(1.4	)	20
Forfeited	(0.4	)	30
Outstanding at September 30, 2015	2.9		$	33

During the nine months ended September 30, 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 September 30, 2015, 1.7 million PSUs were outstanding, and based on performance through September 30, 2015, recipients of PSUs would be entitled to approximately 2.8 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