Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following table summarizes the components of stock-based compensation (in millions):

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2012		2011		2012		2011
Stock-based compensation expense	$	21	$	13	$	61	$	42
Tax benefit	8		5		23		16
Stock-based compensation cost capitalized in property, plant and equipment	1		1		3		3

Stock Options

The following table summarizes our stock option activity for the nine months ended September 30, 2012:

	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value (in millions)
Options outstanding at January 1, 2012	2,764,670		$	41.25
Granted	—		$	—
Exercised	(1,357,451	)	$	40.76
Forfeited or expired	(16,114	)	$	41.93
Options outstanding at September 30, 2012	1,391,105		$	41.73	$	25
Options exercisable at September 30, 2012	1,189,761		$	41.35	$	22

As of September 30, 2012, the weighted average remaining contractual life for the exercisable shares is 4.47 years. As of September 30, 2012, 201,344 options were non-vested. During the nine months ended September 30, 2012, 332,026 options vested.

The intrinsic value of options exercised for the nine months ended September 30, 2012 was $21 million. Total option expense recognized was $0.5 million and $1 million for the nine months ended September 30, 2012 and 2011, respectively.

Restricted Stock Awards

The following table summarizes the Company’s restricted stock awards activity for the nine months ended September 30, 2012:

	Restricted Stock		Weighted Average Grant Date Fair Value
Balance at January 1, 2012	726,224		$	42.25
Grants	162,220		$	53.51
Forfeitures	(14,700	)	$	47.16
Vested and issued	(243,425	)	$	33.71
Balance at September 30, 2012	630,319		$	48.16

Performance Share Awards

The following table summarizes the Company’s performance share activity for the nine months ended September 30, 2012:

	Performance Shares
Balance at January 1, 2012	1,608,733
Grants	573,810
Forfeitures	(42,997	)
Payouts	(504,755	)
Balance at September 30, 2012	1,634,791

Unrecognized Compensation Costs

As of September 30, 2012, there was $69 million of total unrecognized compensation cost related to non-vested stock incentive plan arrangements. That cost is expected to be recognized over a weighted-average period of 1.22 years.