STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

Stock-Based Compensation

The following table reflects the stock-based compensation expense and the related deferred tax benefit recognized in income for the years ended December 31:

(Millions)	2013		2012		2011
Stock options	$	1.8	$	2.0	$	1.8
Performance stock rights	2.7		5.0		3.5
Restricted shares and restricted share units	10.2		9.7		6.1
Nonemployee director deferred stock units	0.9		1.0		1.0
Total stock-based compensation expense	$	15.6	$	17.7	$	12.4
Deferred income tax benefit	$	6.2	$	7.1	$	5.0

No stock-based compensation cost was capitalized during 2013, 2012, and 2011.

Stock Options

The following table shows the weighted-average fair values per stock option granted along with the assumptions incorporated into the binomial lattice valuation models:

	2013 Grant	2012 Grant	2011 Grant
Weighted-average fair value per stock option	$6.03	$6.30	$6.57
Expected term	5 years	5 years	5 years
Risk-free interest rate	0.18% – 2.11%	0.17% – 2.18%	0.27% – 3.90%
Expected dividend yield	5.33%	5.28%	5.34%
Expected volatility	24%	25%	25%

A summary of stock option activity for 2013, and information related to outstanding and exercisable stock options at December 31, 2013, is presented below:

	Stock Options		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining  Contractual Life (in Years)	Aggregate Intrinsic Value (Millions)
Outstanding at December 31, 2012	2,046,355		$	49.25
Granted	319,234		56.00
Exercised	(797,705	)	48.56
Forfeited	(15,510	)	56.00
Expired	(2,000	)	44.73
Outstanding at December 31, 2013	1,550,374		$	50.93	6.2	$	6.6
Exercisable at December 31, 2013	810,086		$	49.96	4.6	$	4.3

The aggregate intrinsic value for outstanding and exercisable options in the above table represents the total pre-tax intrinsic value that would have been received by the option holders had they all exercised their options on December 31, 2013. This is calculated as the difference between our closing stock price on December 31, 2013, and the option exercise price, multiplied by the number of in-the-money stock options. The intrinsic value of options exercised during 2013, 2012, and 2011 was $9.0 million, $11.0 million, and $2.8 million, respectively. The actual tax benefit realized for the tax deductions from these option exercises was $3.6 million during 2013, $4.4 million during 2012, and not significant during 2011.

As of December 31, 2013, $1.0 million of compensation cost related to unvested and outstanding stock options was expected to be recognized over a weighted-average period of 2.4 years.

Performance Stock Rights

The table below reflects the assumptions used in the Monte Carlo valuation models to estimate the fair value of the outstanding performance stock rights at December 31:

	2013	2012	2011
Risk-free interest rate	0.13% – 1.27%	0.17% – 1.27%	0.00% – 1.27%
Expected dividend yield	5.28% – 5.34%	5.18% – 5.34%	5.28% – 5.34%
Expected volatility	15% – 36%	14% – 36%	21% – 36%

A summary of the 2013 activity related to performance stock rights accounted for as equity awards is presented below:

	Performance Stock Rights		Weighted-Average Fair Value *
Outstanding at December 31, 2012	108,314		$	65.38
Granted	22,636		48.50
Award modifications	28,789		39.80
Distributed	(94,758	)	72.36
Adjustment for final payout	21,867		72.36
Forfeited	(1,099	)	48.50
Outstanding at December 31, 2013	85,749		$	46.62

* Reflects the weighted-average fair value used to measure equity awards. Equity awards are measured using the grant date fair value or the fair value on the modification date.

The weighted-average grant date fair value of performance stock rights awarded during 2013, 2012, and 2011 was $48.50, $52.70, and $49.21 per performance stock right, respectively.

A summary of the 2013 activity related to performance stock rights accounted for as liability awards is presented below:

	Performance Stock Rights
Outstanding at December 31, 2012	189,093
Granted	90,496
Award modifications	(28,789	)
Distributed	(61,753	)
Adjustment for final payout	14,255
Forfeited	(4,398	)
Outstanding at December 31, 2013	198,904

The weighted-average fair value of all outstanding performance stock rights accounted for as liability awards as of December 31, 2013, was $29.77 per performance stock right.

As of December 31, 2013, $1.3 million of compensation cost related to unvested and outstanding performance stock rights (equity and liability awards) was expected to be recognized over a weighted-average period of 1.7 years.

The total intrinsic value of performance stock rights distributed during 2013, 2012, and 2011 was $8.8 million, $4.7 million, and $6.3 million, respectively. The actual tax benefit realized for the tax deductions from the distribution of performance stock rights during 2013, 2012, and 2011 was $3.6 million, $1.9 million, and $2.5 million, respectively.

Restricted Shares and Restricted Share Units

A summary of the 2013 activity related to all restricted share unit awards (equity and liability awards) is presented below:

	Restricted Share Unit Awards		Weighted-AverageGrant Date Fair Value
Outstanding at December 31, 2012	505,690		$	48.38
Granted	196,894		55.93
Dividend equivalents	24,089		52.20
Vested and released	(208,682	)	46.36
Forfeited	(6,690	)	52.56
Outstanding at December 31, 2013	511,301		$	52.24

As of December 31, 2013, $10.2 million of compensation cost related to these awards was expected to be recognized over a weighted-average period of 2.3 years.

The total intrinsic value of restricted share and restricted share unit awards vested and released during 2013, 2012, and 2011 was $11.7 million, $10.7 million, and $7.5 million, respectively. The actual tax benefit realized for the tax deductions from the vesting and release of restricted shares and restricted share units during 2013, 2012, and 2011 was $4.7 million, $4.3 million, and $3.0 million, respectively.

The weighted-average grant date fair value of restricted share units awarded during 2013, 2012, and 2011 was $55.93, $53.24, and $49.39 per unit, respectively.