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Stock Compensation (Tables)
12 Months Ended
Dec. 31, 2012
Award Activity

Award activity — (shares in millions)

 

                            Restricted     Performance  
    Options     SARs     Stock Units     Notional Shares  
          Weighted-           Weighted-           Weighted-           Weighted-  
          Average           Average           Average           Average  
          Exercise           Exercise           Grant-Date           Grant-Date  
Outstanding at   Shares     Price     Shares     Price     Shares     Fair Value     Shares     Fair Value  
December 31, 2011     4.6     $ 8.56       0.5     $ 8.13       0.9     $ 16.51       0.4     $ 14.95  
Granted     0.7       15.93       0.2       15.85       0.6       15.83       0.1       16.00  
Exercised or vested     (1.8 )     5.35       (0.2 )     2.67       (0.3 )     16.21       (0.5 )     15.10  
Forfeited or expired     (0.2 )     13.93                       (0.1 )     16.20                  
December 31, 2012     3.3     $ 11.73       0.5     $ 12.62       1.1     $ 16.24       -     $ -  

 

    2012     2011     2010  
Weighted-average per share grant-date fair value                        
Stock options   $ 7.88     $ 9.43     $ 7.23  
SARs     7.84       9.89       6.99  
                         
Intrinsic value of awards exercised or vested                        
Stock options / SARs   $ 18     $ 26     $ 38  
RSUs / PSUs     11       10       14  
Key Assumptions as Part of Black-Scholes Option Pricing Model

We estimated fair values for options and SARs at the date of grant 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 risk-free rate was based on U.S. Treasury security yields at the time of grant. The dividend yield was calculated by dividing the expected annual dividend by the average stock price of our common stock over the prior year. There is no dividend yield assumption for years 2011 and 2010 since there were no plans to pay common stock dividends at that time. 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  
    2012     2011     2010     2012     2011     2010  
Expected term (in years)     6.00       6.00       6.00       6.00       6.00       6.00  
Risk-free interest rate     1.24 %     2.63 %     2.74 %     1.24 %     2.66 %     2.75 %
Dividend yield     1.33 %     0.00 %     0.00 %     1.33 %     0.00 %     0.00 %
Expected volatility     59.90 %     58.03 %     66.15 %     59.90 %     58.16 %     66.10 %
Outstanding Awards Expected to Vest and Exercisable

Outstanding awards expected to vest and exercisable or convertible at December 31, 2012 — (shares in millions)

 

    Equity Awards Outstanding     Equity Awards Outstanding  
    Expected to Vest     That are Exercisable or Convertible  
                Weighted-Average                 Weighted-Average  
          Aggregate           Remaining           Aggregate           Remaining  
          Intrinsic     Exercise     Contractual           Intrinsic     Exercise     Contractual  
    Shares     Value     Price     Life in Years     Shares     Value     Price     Life in Years  
Options / SARs     3.7     $ 15     $ 11.77       7.0       2.3     $ 14     $ 9.39       6.0  
RSUs     1.1       17       -       1.4       0.1       1       -       0.3