Stock Compensation

3 Months Ended

Mar. 31, 2012

Stock Compensation

Note 6. 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 quarter of 2012 under the 2008 Omnibus Incentive Plan.

			Weighted-average Per Share
	Granted		Exercise		Grant Date
	(In millions)		Price		Fair Value
Stock options		0.7	$	15.99	$	7.92
SARs		0.2	$	15.97	$	7.90
RSUs		0.6			$	15.91
PSUs		0.1			$	16.00

Stock options and SARs related to 0.3 million shares were exercised and 0.1 million shares were forfeited in the first quarter of 2012. We received less than $1 of cash from the exercise of stock options and we paid less than $1 of cash to settle SARs during the first quarter of 2012.

We estimated fair values for options and SARs granted during 2012 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 dividend yield was calculated by dividing the expected annual dividend by the average stock price of our common stock over the prior year. The expected volatility was estimated using a combination of the historical volatility of similar entities and the implied volatility of our exchange-traded options.

	Options			SARs
Expected term (in years)		6.00			6.00
Risk-free interest rate		1.24	%		1.24	%
Dividend yield		1.33	%		1.33	%
Expected volatility		59.90	%		59.90	%

We recognized stock compensation expense of $7 and $3 during the first quarters of 2012 and 2011. At March 31, 2012, the total unrecognized compensation cost related to the nonvested equity awards granted and expected to vest over the next 31 months was $29. This cost is expected to be recognized over a weighted-average period of 2.1 years.

Our stockholders approved a 2012 Omnibus Incentive Plan at the April 2012 stockholder meeting which replaced the 2008 Omnibus Incentive Plan (Prior Plan). The plan authorizes grants of stock awards through April 2022 and provides for the issuance of up to 5.0 million shares of common stock, in addition to the 1.9 million shares available for future awards under the Prior Plan and any additional shares which become available as a result of forfeitures. Cash-settled awards do not count against the maximum.