CAPITAL STOCK (Tables)

12 Months Ended

Dec. 31, 2013

Common Stock Outstanding


	2013			2012		2011
Balance, beginning of year		391,640,770			384,117,643		382,391,742
Shares issued for stock-based compensation plans:
Treasury shares issued		25,214			60,767		144,313
Common shares issued		929,596			1,189,693		1,581,588
Common shares issued for conversion of preferred shares		14,399,247			—		—
Treasury shares acquired		(11,221,919	)		—		—
Cordillera consideration (Note 2)		—			6,272,667		—

Balance, end of year		395,772,908			391,640,770		384,117,643

Net Income Per Common Share

A reconciliation of the components of basic and diluted net income per common share for the years ended December 31, 2013, 2012, and 2011 is presented in the table below.


	2013								2012						2011
	Income			Shares		Per Share			Income		Shares		Per Share		Income		Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	2,380			395	$	6.02		$	1,911		389	$	4.91	$	4,496		384	$	11.72
Income (loss) from discontinued operations		(192	)		395		(0.49	)		14		389		0.04		12		384		0.03

Income attributable to common stock	$	2,188			395	$	5.53		$	1,925		389	$	4.95	$	4,508		384	$	11.75

Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock	$	44			9				$	—		—			$	76		14
Stock options and other		—			2					—		2				—		2

Diluted:
Income from continuing operations	$	2,424			406	$	5.97		$	1,911		391	$	4.89	$	4,572		400	$	11.44
Income (loss) from discontinued operations		(192	)		406		(0.47	)		14		391		0.03		12		400		0.03

Income attributable to common stock	$	2,232			406	$	5.50		$	1,925		391	$	4.92	$	4,584		400	$	11.47

Description of Stock Based Compensation Plans and Related Costs

A description of the Company’s stock-based compensation plans and related costs follows:


	2013		2012		2011
	(In millions)
Stock-based compensation expensed:
General and administrative	$	89	$	104	$	69
Lease operating expenses		47		63		44
Stock-based compensation capitalized		55		67		42

	$	191	$	234	$	155

Summary of Stock Options Issued Under Stock Option Plans

A summary of stock options issued and outstanding under the Stock Option Plans and the Omnibus Plans is presented in the table and narrative below:


	2013
	Shares Under Option			Weighted Average Exercise Price
	(In thousands)
Outstanding, beginning of year		7,573		$	90.47
Granted		819			80.89
Exercised		(327	)		72.55
Forfeited or expired		(502	)		97.88

Outstanding, end of year(1)		7,563			89.71

Expected to vest(1)		2,370			92.50

Exercisable, end of year(1)		4,678			88.53

Weighted average fair value of options granted during the year	$	23.18

(1)

As of December 31, 2013, the weighted average remaining contractual life for options outstanding, expected to vest, and exercisable is 6.1 years, 8.2 years, and 4.7 years, respectively. The aggregate intrinsic value of options outstanding, expected to vest, and exercisable at year-end was $43 million, $7 million, and $34 million, respectively. The weighted-average grant-date fair value of options granted during the years 2013, 2012, and 2011 was $23.18, $26.41, and $42.20, respectively.

Risk-Free Rate Based on the U S Treasury Yield Curve

The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.


	2013			2012			2011

Expected volatility		33.60	%		34.94	%		34.47	%
Expected dividend yields		0.99	%		0.82	%		0.47	%
Expected term (in years)		5.5			5.5			5.5
Risk-free rate		0.79	%		0.78	%		1.95	%

Restricted Stock

A summary of restricted stock activity for the year ended December 31, 2013, is presented below.


	Shares			Weighted- Average Grant- Date Fair Value
	(In thousands)
Non-vested at January 1, 2013		2,164		$	97.34
Granted		3,098			82.95
Vested		(907	)		96.79
Forfeited		(402	)		88.61

Non-vested at December 31, 2013		3,953			86.70

Conditional Restricted Stock

The weighted-average remaining life of the unvested conditional restricted stock units is approximately 2.1 years.


	Shares			Weighted- Average Grant- Date Fair Value⁽¹⁾
	(In thousands)
Non-vested at January 1, 2013		1,306		$	78.40
Granted		1,232			79.60
Vested		—			79.49
Cancelled		(1,369	)		83.34
Forfeited		(149	)		78.09

Non-vested at December 31, 2013		1,020			73.73

⁽¹⁾

The fair value of each conditional restricted stock unit award is estimated as of the date of grant using a Monte Carlo simulation with the following assumptions used for all grants made under the plan: (i) a three-year continuous risk-free interest rate; (ii) a constant volatility assumption based on the historical realized stock price volatility of the Company and the designated peer group; and (iii) the historical stock prices and expected dividends of the common stock of the Company and its designated peer group.