Stock Compensation Plans

6 Months Ended

Jun. 30, 2012

Stock Compensation Plans [Abstract]

Stock Compensation Plans [Text Block]

6. STOCK COMPENSATION PLANS

As of June 30, 2012, the Company’s primary types of stock-based compensation were restricted stock and stock options. Stock-based compensation expense for the following periods was:

In millions	Three months ended June 30		Six months ended June 30
	2012	2011	2012	2011
Restricted stock	$10	$6	$20	$12
Stock options	1	2	2	3
Total stock-based compensation (pre-tax)	11	8	22	15
Tax benefit	(4)	(3)	(7)	(5)
Total stock-based compensation (net of tax)	$7	$5	$15	$10

Stock-based compensation expense is recognized in the financial statements based upon fair value. Stock-based compensation expense was higher in the three and six months ended June 30, 2012, as compared to the three and six months ended June 30, 2011, due to an increase in the quantity and value of awards granted.

The weighted average fair value of option grants was estimated based on the below weighted average assumptions and was $8.17 and $7.38 for the six months ended June 30, 2012 and 2011.

	Three months ended June 30		Six months ended June 30
	2012	2011	2012	2011
Dividend yield	—	—	—	—
Risk-free interest rate	0.80%	1.95%	0.80%	2.04%
Expected volatility	40.1%	40.0%	40.1%	40.4%
Expected holding period (years)	5.0	5.1	5.0	5.1

Expected volatility incorporates a blend of both historical volatility of the Company’s stock over a period equal to the expected term of the options and implied volatility from traded options on the Company’s stock, as management believes this is more representative of prospective trends. The Company uses historical data to estimate option exercise and employee terminations within the valuation model. The expected holding period represents the period of time that options are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the five-year U.S. Treasury yield curve in effect at the time of grant.

As of June 30, 2012, the total unrecognized compensation cost of $64 million related to unvested restricted stock grants is expected to be recognized over a weighted average period of approximately 1.6 years. As of June 30, 2012, the total unrecognized compensation cost of $4 million related to unvested stock option grants is expected to be recognized over a weighted average period of approximately 1.4 years.