Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

The Company accounts for stock-based compensation pursuant to certain authoritative guidance which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of estimated forfeitures, over the requisite service period for awards expected to vest. The Company recognized $11.7 million and $9.0 million of pretax stock-based compensation during the three months ended September 30, 2011 and 2010, respectively, and $28.4 million and $27.8 million during the nine months ended September 30, 2011 and 2010, respectively.

In determining the fair value of stock options granted during the nine months ended September 30, 2011, the Company utilized its historical experience to estimate the expected life of the options and volatility.

The following table summarizes the changes in the number of shares of common stock under option for the nine months ended September 30, 2011 (shares in millions):



	Shares		Weighted Average Exercise Price		Exercisable at Period End	Aggregate Intrinsic Value Exercisable
Outstanding at December 31, 2010	16.3		$	22	8.9	$	1.5
Granted	1.0		19
Forfeited / expired	(1.3	)	23
Outstanding at September 30, 2011	16.0		$	21	10.2	$	2.2

The following table summarizes the changes in the number of shares of restricted stock and restricted stock units for the nine months ended September 30, 2011 (shares in millions):



	Shares		Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2010	5.2		$	13
Granted	2.4		17
Vested	(0.8	)	21
Forfeited	(0.2	)	13
Outstanding at September 30, 2011	6.6		$	13

During the nine months ended September 30, 2011, the Company awarded 0.5 million performance stock units which entitle recipients to shares of the Company’s stock at the end of a three-year vesting period if specified market conditions are achieved (“PSUs”). The PSUs entitle recipients to shares of common stock equal to 0% up to 200% of the number of units granted at the vesting date depending on the level of achievement of the specified market and service conditions. As of September 30, 2011, 2.2 million PSUs were outstanding, and based on performance through September 30, 2011, recipients of PSUs would be entitled to 0.9 million shares at the vesting date. The PSUs are included in the preceding table as if the participants earn shares equal to 100% of the units granted.

During the nine months ended September 30, 2011, the Company awarded 0.7 million performance stock units which entitle the recipient to shares of the Company's stock if specified market and service conditions are achieved. The performance stock units vest no earlier than two years from the date of grant and no later than seven years from the date of grant. Based on performance through September 30, 2011, the market conditions have not been achieved. The 0.7 million performance stock units are included in the preceding table as granted during the nine months ended September 30, 2011 and as outstanding as of September 30, 2011.

- 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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