Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

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

Stock-based compensation expense totaled $3 million for each of the quarters ended June 30, 2013 and 2012 and $5 million for each of the six months ended June 30, 2013 and 2012. Stock-based compensation expense relates primarily to the company's performance-based long-term incentive program ("LTIP"), stock options and restricted stock unit ("RSU") awards. LTIP awards cover three-year performance cycles and are measured partly on performance criteria (cumulative earnings per share and/or cumulative free cash flow generation) and partly on market criteria (total shareholder return relative to a peer group of companies). The fair value of LTIP awards containing performance criteria are based on the company's expectations of performance achievement and the closing stock price on the measurement date. The fair value of LTIP awards based on market criteria are measured using a Monte-Carlo simulation using publicly available data.

The company's LTIP awards are liability-classified awards. All other stock-based compensation is equity-classified, and therefore affects "Capital surplus." Changes in "Capital surplus" are primarily a result of stock compensation:



	Quarter ended June 30,						Six months ended June 30,
(In thousands)	2013			2012			2013			2012
Stock-based compensation	$	1,876		$	2,744		$	3,828		$	5,398
Shares withheld for taxes	(2		)	(92		)	(332		)	(220		)
Capital surplus increase	$	1,874		$	2,652		$	3,496		$	5,178

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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