Stock Based Compensation Plans

9 Months Ended

Sep. 30, 2013

6.	Stock Based Compensation Plans

The following table provides a summary of option activity during the nine months ended September 30, 2013:


	Options (In millions)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2012		8.2		$	32.81
Granted		1.6			61.85
Exercised		(0.8	)		21.24
Cancelled		0.0			46.67

Outstanding at September 30, 2013		9.0		$	38.93		6.4	$	193.9

Exercisable at September 30, 2013		4.8		$	25.86		4.4	$	162.4

The following table provides information regarding the intrinsic value of stock options exercised, stock compensation expense related to stock option awards and the fair value of stock options issued:


	Three Months Ended				Nine Months Ended
(In millions)	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Intrinsic Value of Stock Options Exercised	$	5.1	$	4.2	$	31.0	$	38.2
Stock Compensation Expense Related to Stock Option Awards	$	1.9	$	1.6	$	13.3	$	9.3
Issued Stock Options		0.0		0.0		1.6		1.5
Weighted Average Fair Value of Stock Options issued (per share)	$	11.31	$	9.27	$	10.90	$	8.92
Fair Value of Stock Options Issued	$	0.5	$	0.0	$	17.8	$	13.7

The following table provides a summary of the assumptions used in the valuation of issued stock options:


	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Risk-free interest rate		1.7	%		1.0	%		1.4	%		1.0	%
Expected life in Years		6.1			6.2			6.2			6.3
Expected volatility		21.2	%		20.8	%		21.2	%		20.7	%
Dividend Yield		1.8	%		1.7	%		1.8	%		1.8	%

The fair value of stock options is based upon the Black Scholes option pricing model. The Company determined the stock options’ lives based on historical exercise behavior and their expected volatility and dividend yield based on the historical changes in stock price and dividend payments. The risk free interest rate is based on the yield of an applicable term U.S. Treasury instrument.

Stock compensation expense related to restricted stock awards was $0.2 million and $0.3 million for the three and nine months ended September 30, 2013, respectively, and $0.0 million and $0.4 million, respectively, for the same periods in 2012.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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