Incentive Plans (Tables)

12 Months Ended

Dec. 31, 2012

Share-Based Plans, Amounts Recognized

Amounts recognized in the financial statements with respect to share-based plans are shown in the following table.

(Thousands of dollars)	2012		2011		2010
Compensation charged against income before income tax benefit	$	46,694		43,272		41,992
Related income tax benefit recognized in income		10,924		13,053		12,169

Fair Value of Option Award Estimated on Date of Grant using Black-Scholes Pricing Model

The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model based on the assumptions noted in the following table. Expected volatility is based on historical volatility of the Company’s stock and implied volatility on publicly traded at-the-money options on the Company’s stock. The Company estimates the expected term of the options granted based on historical option exercise patterns and considers certain groups of employees exhibiting different behavior. The risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	2012	2011	2010
Fair value per option grant	$12.37 – $17.74	$20.34	$18.75
Assumptions
Dividend yield	1.80% – 2.27%	1.80%	1.80%
Expected volatility	39.00% – 39.62%	37.00%	43.00%
Risk-free interest rate	0.55% – 0.77%	2.10%	2.52%
Expected life	4.00 yrs. – 5.20 yrs.	5.10 yrs.	5.25 yrs.

Changes in Options Outstanding

Changes in options outstanding during the last three years are presented in the following table.

	Number of Shares			Average Exercise Price
Outstanding at December 31, 2009		5,431,560		$	42.01
Granted at FMV		1,605,628			52.85
Exercised		(1,580,950	)		29.04
Forfeited		(153,854	)		53.33
Outstanding at December 31, 2010		5,302,384			48.83
Granted at FMV		1,397,312			67.64
Exercised		(974,500	)		39.30
Forfeited		(290,968	)		52.73
Outstanding at December 31, 2011		5,434,228			55.17
Granted at FMV		1,870,500			57.96
Exercised		(823,855	)		38.37
Forfeited		(573,514	)		60.43
Outstanding at December 31, 2012		5,907,359			57.89
Exercisable at December 31, 2009		3,506,310		$	34.86
Exercisable at December 31, 2010		2,499,610			45.07
Exercisable at December 31, 2011		2,319,735			51.14
Exercisable at December 31, 2012		2,474,636			54.43

Additional Information about Stock Options Outstanding

Additional information about stock options outstanding at December 31, 2012 is shown below.

	Options Outstanding						Options Exercisable
Range of Exercise Prices per Option	No. of Options		Avg. Life Remaining in Years		Aggregate Intrinsic Value		No. of Options		Avg. Life Remaining in Years		Aggregate Intrinsic Value
$21.17 to $23.58		70,750		0.1	$	2,614,000		70,750		0.1	$	2,614,000
$30.30 to $45.70		924,910		3.5		14,327,000		697,410		2.6		11,176,000
$51.07 to $57.32		1,643,097		2.9		11,084,000		1,071,476		2.3		7,252,000
$59.66 to $72.75		3,268,602		4.9		0		635,000		1.9		0
		5,907,359		4.0	$	28,025,000		2,474,636		2.2	$	21,042,000

Changes in Performance-Based RSU Outstanding

Changes in performance-based RSU outstanding for each of the last three years are presented in the following table.

(Number of shares or share units)	2012			2011			2010
Balance at beginning of year		1,174,492			1,023,492			872,027
Granted		653,355			521,423			449,100
Awarded		(260,175	)		(309,656	)		(252,551	)
Forfeited		(141,434	)		(60,767	)		(45,084	)
Balance at end of year		1,426,238			1,174,492			1,023,492

Assumptions used in Valuation of Performance Awards Granted

The assumptions used in the valuation of the performance awards granted in 2012, 2011 and 2010 are presented in the following table.

	2012	2011	2010
Fair value per share at grant date	$54.90 – $63.64	$38.94 – $64.89	$42.38 – $50.95
Assumptions
Expected volatility	37.00%	51.00%	51.00%
Risk-free interest rate	0.30%	1.04%	1.41%
Stock beta	0.913	1.006	1.008
Expected life	3.00 yrs.	3.00 yrs.	3.00 yrs.

Changes in Time-Lapse Restricted Stock and Restricted Stock Units Outstanding

Changes in time-lapse restricted stock units outstanding for each of the last three years are presented in the following table.

(Number of shares or share units)	2012			2011			2010
Balance at beginning of year		116,724			166,173			164,695
Granted		42,256			32,711			43,370
Vested and issued		(44,980	)		(82,160	)		(29,475	)
Forfeited		(15,523	)		0			(12,417	)
Balance at end of year		98,477			116,724			166,173