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Incentive Plans (Tables)

12 Months Ended

Dec. 31, 2011

Amounts recognized in the financial statements with respect to share-based plans are as follows.


(Thousands of dollars)	2011		2010		2009
Compensation charged against income before income tax benefit	$	43,272		41,992		28,618
Related income tax benefit recognized in income		13,053		12,169		7,860

Fair Value of Option Award Estimated on Date of Grant using Black-Scholes Pricing Model

The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model using the assumptions noted in the following table. Expected volatility is based on historical volatility of the Company’s stock and implied volatility on publicly traded at-the-money options on the Company’s stock. The Company estimates the expected term of the options granted based on historical option exercise patterns and considers certain groups of employees exhibiting different behavior. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


	2011			2010			2009
Fair value per option grant	$	20.34			18.75		$	15.15
Assumptions
Dividend yield		1.80	%		1.80	%		1.40	%
Expected volatility		37.00	%		43.00	%		41.00	%
Risk-free interest rate		2.10	%		2.52	%		1.95	%
Expected life		5.10 yrs.			5.25 yrs.			5.25 yrs.

Changes in Options Outstanding

Changes in options outstanding during the last three years are presented in the following table.


	Number of Shares			Average Exercise Price
Outstanding at December 31, 2008		5,399,060		$	40.90
Granted at FMV		1,057,000			43.95
Exercised		(560,500	)		19.58
Forfeited		(464,000	)		60.65

Outstanding at December 31, 2009		5,431,560			42.01
Granted at FMV		1,605,628			52.85
Exercised		(1,580,950	)		29.04
Forfeited		(153,854	)		53.33

Outstanding at December 31, 2010		5,302,384			48.83
Granted at FMV		1,397,312			67.64
Exercised		(974,500	)		39.30
Forfeited		(290,968	)		52.73

Outstanding at December 31, 2011		5,434,228			55.17

Exercisable at December 31, 2009		3,506,310		$	34.86
Exercisable at December 31, 2010		2,499,610			45.07
Exercisable at December 31, 2011		2,319,735			51.14

Additional Information about Stock Options Outstanding

Additional information about stock options outstanding at December 31, 2011 is shown below.


	Options Outstanding						Options Exercisable
Range of Exercise Prices per Option	No. of Options		Avg. Life in Years		Aggregate Intrinsic Value		No. of Options		Avg. Life in Years		Aggregate Intrinsic Value
$19.43 to $23.58		393,750		1.0	$	13,571,000		393,750		1.0	$	13,571,000
$30.30 to $45.23		953,610		3.6		11,466,000		541,235		3.2		6,604,000
$51.07 to $57.32		2,067,156		3.9		5,938,000		730,750		1.7		2,069,000
$67.64 to $72.75		2,019,712		5.1		0		654,000		3.1		0

		5,434,228		4.1	$	30,975,000		2,319,735		2.3	$	22,244,000

Changes in Performance-Based RSU Outstanding

Changes in performance-based RSU outstanding for each of the last three years are presented in the following table.


(Number of shares or share units)	2011			2010			2009
Balance at beginning of year		1,023,492			872,027			806,822
Granted		521,423			449,100			375,050
Awarded		(309,656	)		(252,551	)		0
Forfeited		(60,767	)		(45,084	)		(309,845	)

Balance at end of year		1,174,492			1,023,492			872,027

Assumptions used in Valuation of Performance Awards Granted

The assumptions used in the valuation of the performance awards granted in 2011, 2010 and 2009 are presented in the following table.


	2011	2010	2009
Fair value per share at grant date	$38.94 – $64.89	$42.38 – $50.95	$41.18 – $44.94
Assumptions
Expected volatility	51.00%	51.00%	48.00%
Risk-free interest rate	1.04%	1.41%	1.37%
Stock beta	1.006	1.008	0.973
Expected life	3.00 yrs.	3.00 yrs.	3.00 yrs.

Changes in Time-Lapse Restricted Stock and Restricted Stock Units Outstanding

Changes in time-lapse restricted stock and restricted stock units outstanding for each of the last three years are presented in the following table.


(Number of shares or share units)	2011			2010			2009
Balance at beginning of year		166,173			164,695			132,819
Granted		32,711			43,370			50,290
Expired		(82,160	)		(29,475	)		(18,414	)
Forfeited		0			(12,417	)		0

Balance at end of year		116,724			166,173			164,695

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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