Stockholders' Equity and Equity Instruments | Stockholders’ Equity and Equity Instruments: In May 2015, the Company’s stockholders approved the 2015 Incentive Award Plan (the “2015 Plan”), which authorizes the issuance of 3,000,000 shares of Company common stock. Since the date the 2015 Plan was approved, the Company ceased issuing equity awards under the 2005 Incentive Award Plan (the “2005 Plan”). The 2005 Plan and 2015 Plan allow for grants of equity awards to executive officers, other employees and directors, including restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options and deferred stock units. The grants occur following approval by the compensation committee of the Company’s board of directors, with the amount and terms communicated to employees shortly thereafter. Options Substantially all stock options granted under the 2005 Plan and 2015 Plan vest ratably, in tranches, over a four -year service period. Unexercised options expire after seven years. Options do not have dividend or voting rights. Upon vesting, each option can be exercised to purchase one share of the Company’s common stock. The exercise price of options is equal to the closing stock price on the grant date. To estimate the fair value of options on the grant date, the Company uses the Black-Scholes option valuation model . Award recipients are grouped according to expected exercise behavior. Unless better information is available to estimate the expected term of the options, the estimate is based on historical exercise experience. The risk-free rate, using U.S. Treasury yield curves in effect at the time of grant, is selected based on the expected term of each group. The Company’s historical stock price is used to estimate expected volatility. The inputs used to calculate fair value for options granted in 2017 are included in the table below: Fair value of options granted $9.54 Exercise price $68.00 Expected term (years) 4.5 Expected volatility 23.2% Dividend yield 3.5% Risk-free rate of return 1.8% RSUs Substantially all of the RSUs granted under the 2005 Plan and 2015 Plan vest after three years of service, entitling the holders to one share of common stock for each vested RSU. Unvested RSUs do not have voting rights but are entitled to receive non-forfeitable dividends (generally after a performance hurdle has been satisfied for the year of the grant) or other distributions equal to those declared on the Company’s common stock for RSUs that are earned as a result of the satisfaction of the performance hurdle. The closing stock price on the grant date is used to determine the fair value of RSUs. PSUs Substantially all of the PSUs granted under the 2005 Plan and 2015 Plan are either total shareholder return PSUs (“TSR PSUs”) or return on invested capital PSUs (“ROIC PSUs”). The actual number of shares of the Company’s common stock that may be earned with respect to TSR PSUs is calculated by comparing the Company’s total shareholder return to the total shareholder return for each company comprising the Russell 3000 Index over the three -year performance period and may range from 0% to 150% of the target number of shares based upon the attainment of these performance conditions. The actual number of shares of common stock that may be earned with respect to ROIC PSUs is calculated based on the average of the Company’s annual return on invested capital for each year in the three -year performance period and may range from 0% to 200% of the target number of shares based upon the attainment of these performance conditions. TSR PSUs and ROIC PSUs generally have a three -year performance period. PSUs represent a target number of shares of the Company’s common stock that may be earned before adjustment based upon the attainment of certain performance conditions. Holders of PSUs do not have voting rights but are entitled to receive non-forfeitable dividends or other distributions equal to those declared on the Company’s common stock for PSUs that are earned, which are paid when the shares underlying the PSUs are paid. To estimate the fair value of the TSR PSUs on the grant date, the Company uses a Monte-Carlo simulation model, which simulates future stock prices of the Company as well as the companies comprising the Russell 3000 Index. This model uses historical stock prices to estimate expected volatility and the Company’s correlation to the Russell 3000 Index. The risk-free rate was determined using the same methodology as the option valuations as discussed above. The Company’s closing stock price on the grant date was used to estimate the fair value of the ROIC PSUs. The Company will adjust the expense of the ROIC PSUs based upon its estimate of the number of shares that will ultimately vest at each interim date during the vesting period. During the six months ended June 30, 2017 , the Company reissued the following number of shares from treasury stock: 3,366 shares related to the exercise of stock options, 13,018 shares related to the release of RSUs which vested, 12,946 shares related to the release of PSUs which vested and 4,774 shares related to stock payments. The Company recognized a tax deficiency of $0.5 million from its equity compensation awards as an increase to income tax expense during the first six months of 2017 . During the first six months of 2017 and 2016 , the Company recorded $2.5 million and $2.6 million , respectively, of compensation expense pursuant to its stock-based compensation plans. No amounts have been capitalized. The following table summarizes stock-based compensation activity during the six months ended June 30, 2017 : Stock Options RSUs PSUs (a) Number Weighted-average exercise price Number Weighted-average fair value Number Weighted-average fair value Outstanding at December 31, 2016 442,755 $ 80.07 63,780 $ 80.25 89,011 $ 89.43 Granted 227,351 68.00 34,635 68.00 58,878 73.08 Exercised (b) (3,366 ) 76.03 — — — — Released from restriction (b) — — (13,018 ) 87.18 (12,946 ) 105.77 Cancelled/expired (53,664 ) 74.98 (8,129 ) 70.57 (16,069 ) 89.59 Outstanding at June 30, 2017 613,076 $ 76.06 77,268 $ 74.61 118,874 $ 79.53 (a) Until they vest, PSUs are included in the table at the target level at their grant date and at that level represent one share of common stock per PSU. The final performance period for the 2014 PSU grant was completed in 2016. The Company cancelled 6,900 PSUs in 2017 related to the 2014 PSU grant. (b) Common stock issued for exercised options and for vested and earned RSUs and PSUs was issued from treasury stock. Other Comprehensive Income (Loss) The Company’s comprehensive income (loss) is comprised of net earnings, net amortization of the unrealized loss of the pension obligation, the change in the unrealized gain (loss) on natural gas cash flow hedges and foreign currency translation adjustments. The components of and changes in accumulated other comprehensive income (loss) (“AOCI”) as of and for the three and six months ended June 30, 2017 , and 2016 , are as follows (in millions): Three Months Ended June 30, 2017 (a) Gains and (Losses) on Cash Flow Hedges Defined Benefit Pension Foreign Currency Total Beginning balance $ 0.1 $ (3.6 ) $ (87.0 ) $ (90.5 ) Other comprehensive income (loss) before reclassifications (b) (0.4 ) — (6.6 ) (7.0 ) Amounts reclassified from accumulated other comprehensive loss — 0.1 — 0.1 Net current period other comprehensive income (loss) (0.4 ) 0.1 (6.6 ) (6.9 ) Ending balance $ (0.3 ) $ (3.5 ) $ (93.6 ) $ (97.4 ) Three Months Ended June 30, 2016 (a) Gains and (Losses) on Cash Flow Hedges Defined Benefit Pension Foreign Currency Total Beginning balance $ (1.4 ) $ (3.7 ) $ (68.5 ) $ (73.6 ) Other comprehensive income (loss) before reclassifications (b) 0.7 — (3.3 ) (2.6 ) Amounts reclassified from accumulated other comprehensive loss 0.5 0.1 — 0.6 Net current period other comprehensive income (loss) 1.2 0.1 (3.3 ) (2.0 ) Ending balance $ (0.2 ) $ (3.6 ) $ (71.8 ) $ (75.6 ) Six Months Ended June 30, 2017 (a) Gains and (Losses) on Cash Flow Hedges Defined Benefit Pension Foreign Currency Total Beginning balance $ 0.6 $ (3.7 ) $ (101.8 ) $ (104.9 ) Other comprehensive income (loss) before reclassifications (b) (0.9 ) — 8.2 7.3 Amounts reclassified from accumulated other comprehensive loss — 0.2 — 0.2 Net current period other comprehensive income (loss) (0.9 ) 0.2 8.2 7.5 Ending balance $ (0.3 ) $ (3.5 ) $ (93.6 ) $ (97.4 ) Six Months Ended June 30, 2016 (a) Gains and (Losses) on Cash Flow Hedges Defined Benefit Pension Foreign Currency Total Beginning balance $ (1.6 ) $ (3.8 ) $ (102.9 ) $ (108.3 ) Other comprehensive income (loss) before reclassifications (b) 0.2 — 31.1 31.3 Amounts reclassified from accumulated other comprehensive loss 1.2 0.2 — 1.4 Net current period other comprehensive income (loss) 1.4 0.2 31.1 32.7 Ending balance $ (0.2 ) $ (3.6 ) $ (71.8 ) $ (75.6 ) (a) With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the tables above are reflected net of applicable income taxes. (b) The Company recorded foreign exchange losses (gains) of $8.6 million and $1.4 million in the three and six months ended June 30, 2017 , respectively, and $(4.9) million and $(26.7) million in the three and six months ended June 30, 2016 , respectively, in accumulated other comprehensive loss related to intercompany notes which were deemed to be of long-term investment nature. The amounts reclassified from AOCI to (income) expense for the three and six months ended June 30, 2017 , and 2016 , are shown below (in millions): Amount Reclassified from AOCI Three Months Ended Six Months Ended Line Item Impacted in the Consolidated Statement of Operations Gains and (losses) on cash flow hedges: Natural gas instruments $ — $ — Product cost — — Income tax expense (benefit) Reclassifications, net of income taxes — — Amortization of defined benefit pension: Amortization of loss $ 0.1 $ 0.2 Product cost — — Income tax expense (benefit) Reclassifications, net of income taxes 0.1 0.2 Total reclassifications, net of income taxes $ 0.1 $ 0.2 Amount Reclassified from AOCI Three Months Ended Six Months Ended Line Item Impacted in the Consolidated Statement of Operations Gains and (losses) on cash flow hedges: Natural gas instruments $ 0.8 $ 1.9 Product cost (0.3 ) (0.7 ) Income tax expense (benefit) Reclassifications, net of income taxes 0.5 1.2 Amortization of defined benefit pension: Amortization of loss $ 0.1 $ 0.2 Product cost — — Income tax expense (benefit) Reclassifications, net of income taxes 0.1 0.2 Total reclassifications, net of income taxes $ 0.6 $ 1.4 |