Share-Based Compensation

3 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

8. Share-Based Compensation

The Company recognizes compensation expense based on estimated grant date fair values for all share-based awards issued to employees and directors, including stock options, restricted stock units and performance share units. The total compensation expense related to all share-based compensation plans was $7.4 million and $6.5 million for the three months ended March 31, 2012 and 2011, respectively.

Stock Options

The Company granted 1,221,000 and 200,000 stock options during the three months ended March 31, 2012 and 2011, respectively. The fair market value of each stock option award was estimated on the date of grant using the Black-Scholes-Merton option pricing model. The fair market value of the stock options was determined using the following weighted average assumptions:

	2012			2011
Expected volatility		39.71	%		36.69	%
Risk-free interest rate		1.18	%		2.54	%
Expected life (years)		6.25			6.25
Expected dividend yield		5.06	%		4.57	%

The weighted average fair market value of options granted was $2.96 and $4.39 for the three months ended March 31, 2012 and 2011, respectively.

The following table is a summary of the Company's stock option activity:

	Shares Under Option (Thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (millions)
Outstanding at December 31, 2011		3,995		$	20.75		5.9	$	9.5
Granted		1,221			13.22		9.9
Exercised		(197	)		7.09
Cancelled/forfeited/expired		(245	)		30.73
Outstanding at March 31, 2012		4,774		$	18.87		6.9	$	5.8
Exercisable at March 31, 2012		819		$	7.09		6.9	$	4.3

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on March 31, 2012 and December 31, 2011, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2012 and December 31, 2011. This amount will change in future periods based on the fair market value of the Company's stock and the number of options outstanding. Total intrinsic value of options exercised for the three months ended March 31, 2012 and 2011 was $1.2 million and $1.0 million, respectively.

Compensation expense related to stock options for the three months ended March 31, 2012 and 2011 was $1.1 million and $0.8 million, respectively. As of March 31, 2012, $5.1 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted average period of 3.0 years.

Restricted Stock Units

Nonvested restricted stock unit awards as of March 31, 2012 and December 31, 2011, and changes during the three months ended March 31, 2012, were as follows:

	Shares (Thousands)			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2011		4,989		$	13.94
Granted		817			10.65
Vested		(2,386	)		15.74
Forfeited		(77	)		12.84
Nonvested at March 31, 2012		3,343		$	11.86

Compensation expense related to restricted stock units for the three months ended March 31, 2012 and 2011 was $5.8 million and $5.4 million, respectively. As of March 31, 2012, there was $28.6 million of unrecognized compensation expense related to approximately 3.1 million restricted stock unit awards, with a weighted average grant date fair market value of $11.79, that are expected to vest over a weighted average period of 2.4 years. The fair value of these awards was determined on the date of grant based on the Company's stock price reduced by the present value of expected dividends through the vesting period.

Performance Share Units

During the three months ended March 31, 2012 and 2011, 233,000 and 235,000 performance share unit awards were granted to certain executive officers, payable upon the achievement of certain established performance targets for the three years ending December 31, 2014 and 2013, respectively. Distributions under these awards are payable at the end of the performance period in common stock or cash, at the Company's discretion. The performance periods for the shares awarded during the three months ended March 31, 2012 and 2011 are January 1, 2012 through December 31, 2014 and January 1, 2011 through December 31, 2013, respectively. The total potential payouts for awards granted during the three months ended March 31, 2012 and 2011 range from 116,500 to 233,000 shares and 117,500 to 235,000 shares, respectively, should certain performance targets be achieved. For the three months ended March 31, 2012 and 2011, the grant date fair market values of the awards granted were $10.12 and $15.54, respectively. The fair value of these awards was determined on the date of grant based on the Company's stock price reduced by the present value of expected dividends through the vesting period. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee or a change in control of the Company.

Compensation expense for the awards granted in 2012 and 2011 is currently being recognized based on the maximum estimated payout of 233,000 and 235,000 shares, for each respective period. Compensation expense related to performance share unit awards for the three months ended March 31, 2012 and 2011 was $0.5 million and $0.3 million, respectively. As of March 31, 2012, there was $4.3 million of unrecognized compensation expense related to performance share unit awards, which is expected to be recognized over a weighted average period of 2.3 years.