TopBuild Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation (Tables)

Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of share-based compensation expense and related income tax benefit

The following table presents share-based compensation amounts recognized in our condensed consolidated statements of operations, in thousands:


	Three Months Ended March 31,
	2020		2019
Share-based compensation expense	$	3,908	$	2,972
Income tax benefit realized	$	5,500	$	2,246

Schedule of share-based compensation activity

The following table presents a summary of our share-based compensation activity for the three months ended March 31, 2020, in thousands, except per share amounts:


	RSAs			Stock Options
	Number of Shares	Weighted Average Grant Date Fair Value Per Share		Number of Shares	Weighted Average Grant Date Fair Value Per Share		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance December 31, 2019	411.6	$	57.51	373.5	$	17.06	$	45.90	$	21,356.4
Granted	87.3	$	134.81	71.0	$	39.49	$	118.58
Converted/Exercised	(222.0)	$	42.71	(68.2)	$	14.96	$	39.91	$	4,089.0
Forfeited	(8.2)	$	96.26	(5.5)	$	39.49	$	118.58
Balance March 31, 2020	268.7	$	82.04	370.8	$	21.41	$	59.84	$	7,598.9

Exercisable March 31, 2020 (a)				142.1	$	17.63	$	47.43	$	3,526.3

(a)	The weighted average remaining contractual term for vested stock options is approximately 7.2 years.

Schedule of unrecognized share-based compensation expense relating to unvested awards

Unrecognized share-based compensation expense related to unvested awards is shown in the following table, dollars in thousands:


	As of March 31, 2020
	Unrecognized Compensation Expense on Unvested Awards		Weighted Average Remaining Vesting Period
RSAs	$	12,175		1.6 years
Stock options		2,489		1.2 years
Total unrecognized compensation expense related to unvested awards	$	14,664

Schedule of assumptions used to estimate the fair values of options granted

The following table presents the assumptions used to estimate the fair values of stock options granted in 2020 and 2019:


	2020			2019
Risk free interest rate		1.53	%		2.59	%
Expected volatility, using historical return volatility and implied volatility		31.50	%		32.50	%
Expected life (in years)		6.0			6.0
Dividend yield		0.00	%		0.00	%
Estimated fair value of stock options at grant date	$	39.49		$	21.16

Performance-based conditions | Restricted Stock Awards

Share-Based Compensation

Schedule of the range of payouts and the related expense for RSAs with performance-based conditions

The following table shows the range of payouts and the related expense for our outstanding RSAs with performance-based conditions, in thousands:


			Payout Ranges and Related Expense
RSAs with Performance-Based Conditions	Grant Date Fair Value		0%		25%		100%		200%
February 19, 2018	$	2,052	$	—	$	513	$	2,052	$	4,104
February 18, 2019	$	2,477	$	—	$	619	$	2,477	$	4,954
February 17, 2020	$	2,938	$	—	$	735	$	2,938	$	5,876

Market-based conditions | Restricted Stock Awards

Share-Based Compensation

Schedule of key inputs used to estimate the fair value of awards

The following are key inputs in the Monte Carlo analysis for awards granted in 2020 and 2019


	2020			2019
Measurement period (in years)		2.88			2.87
Risk free interest rate		1.40	%		2.50	%
Dividend yield		0.00	%		0.00	%
Estimated fair value of market-based RSAs at grant date	$	158.24		$	80.74