Stock-Based Compensation (Notes)

3 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following table summarizes the components of stock-based compensation:

	Three Months Ended
	March 31,
	2013		2012
	(In millions)
Stock-based compensation expense	$	28	$	17
Tax benefit	11		6
Stock-based compensation cost capitalized in property, plant and equipment	2		1

Stock Options

The following table summarizes our stock option activity for the three months ended March 31, 2013:

	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value (In millions)
Options outstanding at January 1, 2013	1,192,670		$	41.86
Granted	—		$	—
Exercised	(295,218	)	$	40.67
Forfeited or expired	(10,370	)	$	41.46
Options outstanding at March 31, 2013	887,082		$	42.27	$	20
Options exercisable at March 31, 2013	887,082		$	42.27	$	20

As of March 31, 2013, the weighted average remaining contractual life for the exercisable shares is 4.61 years. During the three months ended March 31, 2013, 200,844 options vested. As of March 31, 2013, all options were vested.

The intrinsic value of options exercised for the three months ended March 31, 2013 and 2012 was $7 million and $10 million, respectively. No option expense was recognized for the three months ended March 31, 2013 and $0.3 million of option expense was recognized for the three months ended March 31, 2012.

The Company includes both historical and implied share-price volatility in option volatility. Implied volatility is derived from exchange traded options on DTE Energy common stock. The Company’s expected option life estimate is based on historical data.

Restricted Stock Awards

The following table summarizes the Company’s restricted stock awards activity for the three months ended March 31, 2013:

	Restricted Stock		Weighted Average Grant Date Fair Value
Balance at December 31, 2012	597,648		$	48.33
Grants	115,030		$	64.35
Forfeitures	(1,008	)	$	48.29
Vested and issued	(157,642	)	$	43.90
Balance at March 31, 2013	554,028		$	52.90

Performance Share Awards

The following table summarizes the Company’s performance share activity for the three months ended March 31, 2013:

	Performance Shares
Balance at December 31, 2012	1,634,364
Grants	517,924
Forfeitures	(6,894	)
Payouts	(548,624	)
Balance at March 31, 2013	1,596,770

Unrecognized Compensation Costs

As of March 31, 2013, there was $92 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 1.64 years.