Stock-Based Compensation (Notes)

9 Months Ended

Sep. 30, 2013

Share-based Compensation [Abstract]

Stock-based Compensation

STOCK-BASED COMPENSATION

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In millions)
Stock-based compensation expense	$	18	$	21	$	81	$	61
Tax benefit	$	7	$	8	$	31	$	23
Stock-based compensation cost capitalized in property, plant and equipment	$	1	$	1	$	5	$	3

Stock Options

The following table summarizes our stock option activity for the nine months ended September 30, 2013:

	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value (In millions)
Options outstanding at December 31, 2012	1,192,670		$	41.86
Exercised	(399,139	)	$	40.54
Forfeited or expired	(10,370	)	$	41.46
Options outstanding at September 30, 2013	783,161		$	42.54	$	20
Options exercisable at September 30, 2013	783,161		$	42.54	$	20

As of September 30, 2013, the weighted average remaining contractual life for the exercisable shares is 4.17 years. During the nine months ended September 30, 2013, 200,844 options vested. As of September 30, 2013, all options were vested.

The intrinsic value of options exercised for the nine months ended September 30, 2013 and 2012 was $11 million and $21 million, respectively. No option expense was recognized for the nine months ended September 30, 2013 and $0.5 million of option expense was recognized for the nine months ended September 30, 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 nine months ended September 30, 2013:

	Restricted Stock		Weighted Average Grant Date Fair Value
Balance at December 31, 2012	597,648		$	48.33
Grants	127,785		$	64.72
Forfeitures	(5,621	)	$	53.53
Vested and issued	(218,600	)	$	45.39
Balance at September 30, 2013	501,212		$	53.71

Performance Share Awards

The following table summarizes the Company’s performance share activity for the nine months ended September 30, 2013:

	Performance Shares
Balance at December 31, 2012	1,634,364
Grants	549,360
Forfeitures	(36,168	)
Payouts	(548,624	)
Balance at September 30, 2013	1,598,932

Unrecognized Compensation Costs

As of September 30, 2013, there was $72 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 1.18 years.