Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Preferred Stock

As of December 31, 2013, we had one class of preferred stock outstanding. See Note 18 - Preferred Stock for further information. We are authorized to issue approximately 22 million shares of cumulative preferred stock, $1.00 par value per share.

Common Stock

We have 1.75 billion authorized shares of common stock, $1.00 par value per share. At December 31, 2013, 127 million shares were reserved for issuance under our incentive compensation plans, 48 million shares were reserved for debt to equity exchanges, 27 million shares were reserved for conversion of the Series A convertible preferred stock and 1 million shares were reserved for the conversion of convertible debt.

Treasury Stock

We account for the repurchased common stock under the cost method and include such treasury stock as a component of our common shareholder's equity. Retirement of treasury stock is recorded as a reduction of Common stock and Additional paid-in capital at the time such retirement is approved by our Board of Directors.

The following provides cumulative information relating to our share repurchase programs from their inception in October 2005 through December 31, 2013 (shares in thousands):

Authorized share repurchase programs	$	6,500
Share repurchase cost	$	5,386
Share repurchase fees	$	9
Number of shares repurchased	493,492

In 2013, the Board of Directors authorized an additional $0.5 billion in share repurchase bringing the total cumulative authorization to $6.5 billion. As of December 31, 2013, approximately $1.1 billion of that authority remained available.

The following table reflects the changes in Common and Treasury stock shares (shares in thousands):

	Common Stock Shares		Treasury Stock Shares
Balance at December 31, 2010	1,397,578		—
Stock based compensation plans, net	11,027		—
Contributions to U.S. pension plan(1)	16,645		—
Acquisition of Treasury stock	—		87,943
Cancellation of Treasury stock	(72,435)		(72,435)
Other	34		—
Balance at December 31, 2011	1,352,849		15,508
Stock based compensation plans, net	17,343		—
Contributions to U.S. pension plan(1)	15,366		—
Acquisition of Treasury stock	—		146,278
Cancellation of Treasury stock	(146,862	)	(146,862	)
Balance at December 31, 2012	1,238,696		14,924
Stock based compensation plans, net	28,731		—
Acquisition of Treasury stock	—		65,179
Cancellation of Treasury stock	(58,102	)	(58,102	)
Conversion of 2014 9% Notes	996		—
Balance at December 31, 2013	1,210,321		22,001

_____________________________

(1) Refer to Note 15 - Employee Benefits Plans for additional information.

Stock-Based Compensation

We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs), performance shares (PSs) and non-qualified stock options. We grant stock-based awards in order to continue to attract and retain employees and to better align employees' interests with those of our shareholders. Each of these awards is subject to settlement with newly issued shares of our common stock. At December 31, 2013 and 2012, 59 million and 50 million shares, respectively, were available for grant of awards.

Stock-based compensation expense was as follows:

	Year Ended December 31,
	2013		2012		2011
Stock-based compensation expense, pre-tax	$	90	$	125	$	123
Income tax benefit recognized in earnings	34		48		47

Restricted Stock Units:Compensation expense is based upon the grant date market price. The compensation expense is recorded over the vesting period, which is normally three years from the date of grant, based on management's estimate of the number of shares expected to vest.

Performance Shares:We grant officers and selected executives PSs that vest contingent upon meeting pre-determined Revenue, Earnings per Share (EPS) and Cash Flow from Operations targets. These shares entitle the holder to one share of common stock, payable after a three-year period and the attainment of the stated goals. If the annual actual results for Revenue exceed the stated targets and if the cumulative three-year actual results for EPS and Cash Flow from Operations exceed the stated targets, then the plan participants have the potential to earn additional shares of common stock. This overachievement cannot exceed 50% of the original grant.

The fair value of PSs is based upon the market price of our stock on the date of the grant. Compensation expense is recognized over the vesting period, which is normally three years from the date of grant, based on management's estimate of the number of shares expected to vest. If the stated targets are not met, any recognized compensation cost would be reversed.

Employee Stock Options:With the exception of the conversion of ACS options in connection with the ACS acquisition in 2010, we have not issued any new stock options associated with our employee long-term incentive plan since 2004. All stock options previously issued under our employee long-term incentive plan are fully exercised, cancelled or expired as of December 31, 2013.

We had 14,199 thousand and 33,693 thousand of ACS options outstanding at December 31, 2013 and 2012, respectively. The ACS options at December 31, 2013 generally expire within the next 3 years. Unvested ACS options at December 31, 2013 will become fully vested by August 2014.

Summary of Stock-based Compensation Activity

	2013				2012				2011
(Shares in thousands)	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Restricted Stock Units
Outstanding at January 1	30,414		$	9.19	33,784		$	8.70	32,431		$	8.68
Granted	610		9.09		13,033		7.82		8,035		10.66
Vested	(9,992	)	8.43		(14,848	)	6.89		(5,225	)	11.64
Cancelled	(1,953	)	8.77		(1,555	)	8.97		(1,457	)	8.57
Outstanding at December 31	19,079		9.62		30,414		9.19		33,784		8.70
Performance Shares
Outstanding at January 1	14,536		$	8.74	9,763		$	9.21	7,771		$	9.78
Granted	1,839		7.97		5,193		7.87		4,852		10.42
Vested	(6,817	)	8.03		—		—		(1,587	)	12.84
Cancelled	(1,500	)	8.82		(420	)	8.96		(1,273	)	12.79
Outstanding at December 31	8,058		9.15		14,536		8.74		9,763		9.21
Stock Options
Outstanding at January 1	33,732		$	6.86	50,070		$	6.98	71,038		$	8.00
Granted	—		—		—		—		—		—
Cancelled/expired	(1,298	)	6.53		(8,617	)	8.58		(14,889	)	8.38
Exercised	(18,235	)	6.82		(7,721	)	5.69		(6,079	)	8.21
Outstanding at December 31	14,199		6.95		33,732		6.86		50,070		6.98
Exercisable at December 31	12,164		7.06		28,676		6.95		39,987		7.14

In 2013, we deferred the annual grant of RSUs and PSs from July 1, 2013 to January 1, 2014. RSUs granted in 2013 represent off-cycle awards while PSs granted in 2013 represent overachievement shares associated with the 2010 PSs grant, which vested in 2013. Commencing in 2014, the annual award cycle will be granted entirely in PSs and on January 1, 2014, we granted 8,395 thousand PSs with a grant date fair value of $12.17 per share.

The total unrecognized compensation cost related to non-vested stock-based awards at December 31, 2013 was as follows:

Awards	Unrecognized Compensation		Remaining Weighted-Average Vesting Period (Years)
Restricted Stock Units	$	60	1.3
Performance Shares	20		1.3
Stock Options	4		0.6
Total	$	84

The aggregate intrinsic value of outstanding RSUs and PSs awards was as follows:

Awards	December 31, 2013
Restricted Stock Units	$	232
Performance Shares	98

Information related to stock options outstanding and exercisable at December 31, 2013 was as follows:

	Options
	Outstanding		Exercisable
Aggregate intrinsic value	$	74	$	62
Weighted-average remaining contractual life (years)	3.3		3.0

The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards was as follows:

	December 31, 2013						December 31, 2012						December 31, 2011
Awards	Total Intrinsic Value		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit
Restricted Stock Units	$	91	$	—	$	30	$	117	$	—	$	33	$	56	$	—	$	22
Performance Shares	62		—		22		—		—		—		17		—		6
Stock Options	51		124		19		12		44		4		18		44		7

No Performance Shares vested in 2012 since the 2009 primary award grant that normally would have vested in 2012 was replaced with a grant of Restricted Stock Units with a market based condition and therefore were accounted and reported for as part of Restricted Stock Units.