TopBuild Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Share-Based Compensation (Tables)

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

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

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


	Year Ended December 31,
	2019		2018		2017
Share-based compensation expense	$	13,658	$	11,317	$	9,889
Income tax benefit realized	$	6,285	$	3,154	$	2,882

Schedule of share-based compensation activity

The following table presents a summary of our share-based compensation activity for the year ended December 31, 2019, 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, 2018	499.2	$	41.29	611.4	$	13.10	$	34.45	$	8,685.8
Granted	250.6	$	67.37	103.5	$	21.16	$	58.08
Converted/Exercised	(312.4)	$	30.96	(329.0)	$	10.91	$	28.26	$	18,556.9
Forfeited	(25.8)	$	58.65	(9.7)	$	20.28	$	54.62
Expired				(2.7)	$	14.44	$	38.39
Balance December 31, 2019	411.6	$	57.51	373.5	$	17.06	$	45.90	$	21,356.4

Exercisable December 31, 2019 (a)				73.9	$	16.10	$	42.98	$	4,438.7

(a)	The weighted average remaining contractual term for vested stock options is 6.9 years.

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

We had unrecognized share-based compensation expense relating to unvested awards as shown in the following table, dollars in thousands:


	As of December 31, 2019
	Unrecognized Compensation Expense on Unvested Awards		Weighted Average Remaining Vesting Period
Unrecognized compensation expense related to unvested awards:
RSAs	$	8,221		1.0 years
Stock options		1,524		0.7 years
Total unrecognized compensation expense related to unvested awards	$	9,745

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 2019 and 2018:


	2019			2018
Measurement period (years)		2.87			2.87
Risk free interest rate		2.50	%		2.36	%
Dividend yield		0.00	%		0.00	%
Estimated fair value of market-based RSAs at grant date	$	80.74		$	103.31

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 the stock options granted in 2019 and 2018:


	2019			2018
Risk free interest rate		2.59	%		2.78	%
Expected volatility, using historical return volatility and implied volatility		32.50	%		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	$	21.16		$	27.44

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


			Payout Ranges and Related Expense
RSAs with Performance-Based Conditions	Grant Date Fair Value		0%		25%		100%		200%
February 21, 2017	$	1,816	$	—	$	454	$	1,816	$	3,632
February 19, 2018	$	2,052	$	—	$	513	$	2,052	$	4,104
February 18, 2019	$	2,488	$	—	$	622	$	2,488	$	4,976