Stock-Based Compensation

3 Months Ended

Sep. 30, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation [Text Block]

Note 7: Stock-Based Compensation

Our stock-based compensation expense consists primarily of performance awards (PAs), shareholder value awards (SVAs), and restricted stock units (RSUs). We recognized pretax stock-based compensation cost of $36.5 million and $46.8 million in the third quarter of 2011 and 2010, respectively. In the first nine months of 2011 and 2010, we recognized pretax stock-based compensation expense of $110.7 million and $175.2 million, respectively.

PAs are granted to officers and management and are payable in shares of our common stock. The number of PA shares actually issued, if any, varies depending on the achievement of certain earnings per share targets over a two-year period. PA shares are accounted for at fair value based upon the closing stock price on the date of grant and fully vest at the end of the measurement periods. As of September 30, 2011, the total remaining unrecognized compensation cost related to nonvested PAs amounted to $29.5 million, which will be amortized over the weighted-average remaining requisite service period of approximately 11 months.

SVAs are granted to officers and management and are payable in shares of common stock at the end of a three-year period. The number of shares actually issued varies depending on our stock price at the end of the three-year vesting period compared to pre-established target prices. We measure the fair value of the SVA unit on the grant date using a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. As of September 30, 2011, the total remaining unrecognized compensation cost related to nonvested SVAs amounted to $59.0 million, which will be amortized over the weighted-average remaining requisite service period of approximately 22 months.

RSUs are granted to certain employees and are payable in shares of our common stock. RSU shares are accounted for at fair value based upon the closing stock price on the date of grant. The corresponding expense is amortized over the vesting period, typically three years. As of September 30, 2011, the total remaining unrecognized compensation cost related to nonvested RSUs amounted to $61.4 million, which will be amortized over the weighted-average remaining requisite service period of 23 months.