Notes to Consolidated Financial Statements continued The following table summarizes Verizon’s Restricted Stock Unit and Performance Stock Unit activity: Restricted Stock Units (shares in thousands) Equity Awards Liability Awards Performance Stock Units Outstanding January 1, 2015 15,007 19,966 Granted 4,958 7,044 Payments (5,911) (6,732) Cancelled/Forfeited (151) (3,075) Outstanding December 31, 2015 13,903 17,203 Granted 4,409 6,391 Payments (4,890) (4,702) Cancelled/Forfeited (114) (1,143) Outstanding Adjustments 170 Outstanding December 31, 2016 13,308 17,919 Granted 4,216 25,168 6,564 Payments (4,825) (8,487) (6,031) Cancelled/Forfeited (66) (2,690) (217) Outstanding December 31, 2017 12,633 13,991 18,235 As of December 31, 2017, unrecognized compensation expense related to the unvested portion of Verizon’s RSUs and PSUs was approximately $1.0 billion and is expected to be recognized over approximately two years. The RSUs granted in 2017 and 2016 have weighted-average grant date fair values of $49.93 and $51.86 per unit, respectively. During 2017, 2016 and 2015, we paid $0.8 billion, $0.4 billion and $0.4 billion, respectively, to settle RSUs and PSUs classified as liability awards. Stock-Based Compensation Expense After-tax compensation expense for stock-based compensation related to RSUs and PSUs described above included in Net income attributable to Verizon was $0.4 billion, $0.4 billion and $0.3 billion for 2017, 2016 and 2015, respectively. Note 10 Employee Benefits We maintain non-contributory defined benefit pension plans for certain employees. In addition, we maintain postretirement health care and life insurance plans for certain retirees and their dependents, which are both contributory and non-contributory, and include a limit on our share of the cost for certain recent and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include pension and benefit related credits and/or charges based on actuarial assumptions, including projected discount rates, an estimated return on plan assets, and health care trend rates. These estimates are updated in the fourth quarter to reflect actual return on plan assets and updated actuarial assumptions or upon a remeasurement. The adjustment is recognized in the income statement during the fourth quarter or upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses. Pension and Other Postretirement Benefits Pension and other postretirement benefits for certain employees are subject to collective bargaining agreements. Modifications in benefits have been bargained from time to time, and we may also periodically amend the benefits in the management plans. The following tables summarize benefit costs, as well as the benefit obligations, plan assets, funded status and rate assumptions associated with pension and postretirement health care and life insurance benefit plans. 82
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