Stock Compensation

9 Months Ended

Sep. 30, 2011

Stock Compensation

Note 7.  Stock Compensation

Our Board of Directors approved the grant of stock options, stock appreciation rights (SARs), restricted stock units (RSUs) and performance share units (PSUs) shown in the table below during the first nine months of 2011 under the 2008 Omnibus Incentive Plan.

			Weighted-average
	Granted		Per Share		Grant Date
	(In millions)		Exercise Price		Fair Value
Stock options		0.7	$	17.05	$	9.55
SARs		0.1	$	17.82	$	10.01
RSUs		1.0			$	17.14
PSUs		0.2			$	17.80

Stock options and SARs related to 2.0 million shares were exercised and 0.4 million shares were forfeited in the first nine months of 2011.  We received $11 of cash from the exercise of stock options and we paid $4 of cash to settle SARs, RSUs and PSUs during the first nine months of 2011.  We also issued 0.2 million shares related to PSUs based on achievement of our 2010 performance goals and 0.3 million in RSUs based on vesting.

We estimated fair values for options and SARs granted during 2011 using the following key assumptions as part of the Black-Scholes option pricing model.  The expected term was estimated using the simplified method because the limited period of time our common stock has been publicly traded provides insufficient historical exercise data.  The expected volatility was estimated using a combination of the historical volatility of similar entities and the implied volatility of our exchange-traded options.  The dividend yield is assumed to be zero since there are no current plans to pay common stock dividends.

	Options			SARs
Expected term (in years)		6.00			6.00
Risk-free interest rate		2.64	%		2.67	%
Expected volatility		58.05	%		58.18	%

We recognized stock compensation expense of $1 and $5 during the third quarters of 2011 and 2010 and $9 and $11 during the respective nine-month periods.  At September 30, 2011, the total unrecognized compensation cost related to the non-vested portions of all stock based awards granted and expected to vest over the next one to 35 months was $20.  This cost is expected to be recognized over a weighted-average period of 23 months.