Share-Based Compensation

3 Months Ended

Mar. 31, 2013

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

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

Share-Based Compensation

The Company’s outstanding share-based awards consist mainly of non-qualified stock options, stock-settled stock appreciation rights (SARs) and restricted stock and restricted stock units (collectively, restricted shares). As of March 31, 2013, the Company had 35 million shares available for future grants of share-based awards under its share-based compensation plan, including, but not limited to, incentive or non-qualified stock options, SARs and up to 14 million of awards in restricted shares.

Stock Options and SARs

Stock option and SAR activity for the three months ended March 31, 2013 is summarized in the table below:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in millions)				(in years)	(in millions)
Outstanding at beginning of period	63		$	45
Granted	8		57
Exercised	(4	)	36
Forfeited	(2	)	57
Outstanding at end of period	65		47		4.5	$	693
Exercisable at end of period	53		46		3.5	631
Vested and expected to vest, end of period	64		47		4.5	690

Restricted Shares

Restricted share activity for the three months ended March 31, 2013 is summarized in the table below:

(shares in millions)	Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	9	$	46
Granted	3	57
Nonvested at end of period	12	49

Other Share-Based Compensation Data

(in millions, except per share amounts)	Three Months Ended March 31,
	2013		2012
Stock Options and SARs
Weighted-average grant date fair value of shares granted, per share	$	19	$	18
Total intrinsic value of stock options and SARs exercised	83		220
Restricted Shares
Weighted-average grant date fair value of shares granted, per share	57		52
Total fair value of restricted shares vested	—		291
Share-Based Compensation Items
Share-based compensation expense, before tax	99		140
Share-based compensation expense, net of tax effects	89		88
Income tax benefit realized from share-based award exercises	33		187

(in millions, except years)	March 31, 2013
Unrecognized compensation expense related to share awards	$	498
Weighted-average years to recognize compensation expense	1.4

Share-Based Compensation Recognition and Estimates

The principal assumptions the Company used in calculating grant-date fair value for stock options and SARs were as follows:

	Three Months Ended March 31,
	2013	2012
Risk-free interest rate	1.0%	0.9%
Expected volatility	42.6%	43.4%
Expected dividend yield	1.5%	1.3%
Forfeiture rate	5.0%	5.0%
Expected life in years	5.3	5.3 - 5.6

Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock and the implied volatility from exchange-traded options on the Company’s common stock. Expected dividend yields are based on the per share cash dividend paid by the Company. The Company uses historical data to estimate option and SAR exercises and forfeitures within the valuation model. The expected lives of options and SARs granted represents the period of time that the awards granted are expected to be outstanding based on historical exercise patterns.