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STOCK-BASED COMPENSATION (Tables)
 12 Months Ended
Dec. 31, 2012
Schedule of options outstanding

The following is a continuity schedule of options outstanding [number of options in the table below are expressed in whole numbers]:

 

     Options outstanding  
     Number
of options		     Weighted
average
exercise
price		      Number
of options
exercisable		  

Outstanding at December 31, 2009

      7,150,544      Cdn$ 34.26         4,988,544   

Granted

      6,341,000        34.04         —     

Exercised

      (1,504,616 )      34.31         (1,504,616 ) 

Cancelled [i]

      (844,478 )      33.04         (844,478 ) 

Vested

      —          —           722,666   
  

 

 

    

 

 

     

 

 

  

Outstanding at December 31, 2010

      11,142,450      Cdn$ 34.22         3,362,116   

Exercised [ii]

      (2,737,253 )      33.28         (2,737,253 ) 

Cancelled

      (1,537,830 )      48.86         (1,426,164 ) 

Vested

      —          —           2,868,001   
  

 

 

    

 

 

     

 

 

  

Outstanding at December 31, 2011

      6,867,367      Cdn$ 31.54         2,066,700   

Granted

      1,389,000        48.22         —     

Exercised [iii]

      (1,525,159 )      28.46         (1,525,159 ) 

Cancelled

      (107,966 )      53.14         (58,967 ) 

Vested

      —          —           2,745,000   
  

 

 

    

 

 

     

 

 

  

Outstanding at December 31, 2012

      6,623,242      Cdn$ 35.39         3,227,574   
  

 

 

    

 

 

     

 

 

  

The total intrinsic value of options exercised during 2012 was $6 million [2011 - $19 million; 2010 - $14 million].

 

  [i] On August 19, 2010, options to acquire 243,000 Common Shares were surrendered for cancellation in exchange for payment of the in-the-money value of such options on such date. The aggregate in-the-money value of the options surrendered was $4 million and was charged to contributed surplus.

On November 8, 2010, options to acquire 386,666 Common Shares were surrendered for cancellation in exchange for payment of the in-the-money value of such options on such date. The aggregate in-the-money value of the options surrendered was $8 million and was charged to contributed surplus.

 

  [ii] On June 22, 2011, the Company’s Honorary Chairman and Founder, Mr. Stronach, exercised 1,083,333 options on a cashless basis in accordance with applicable stock option plans. On exercise, cash payments totalling $25 million were made to Mr. Stronach.

On July 13, 2011, 200,001 options were exercised on a cashless basis in accordance with applicable stock option plans. On exercise, cash payments totalling $5 million were made to the stock option holder.

 

  [iii] On February 26, 2012, 200,000 options were exercised on a cashless basis in accordance with applicable stock option plans. On exercise, cash payments totalling $4 million were made to the stock option holder.
Summary of characteristics of options outstanding

At December 31, 2012, the outstanding options consist of [number of options in the table below are expressed in whole numbers]:

 

     Options outstanding  
     Number
of options		      Remaining
contractual
life [years]		      Number
of options
exercisable		  

$15 to $20

      986,868         3.2         986,868   

$25 to $30

      3,050,032         4.2         1,400,032   

$35 to $40

      60,000         4.0         60,000   

$40 to $45

      27,342         0.5         27,342   

$45 to $50

      1,384,000         2.8         10,000   

$50 to $55

      1,115,000         5.0         743,332   
  

 

 

     

 

 

     

 

 

  
     6,623,242            3,227,574   
  

 

 

     

 

 

     

 

 

  

Weighted average exercise price

    Cdn$ 35.39          Cdn$ 30.93   
  

 

 

     

 

 

     

 

 

  

Weighted average life remaining [years]

      4.54            4.00   
  

 

 

     

 

 

     

 

 

  

Aggregate intrinsic value at December 31, 2012

    $ 93          $ 60   
  

 

 

     

 

 

     

 

 

  
Fair value of stock options granted

The weighted average assumptions used in measuring the fair value of stock options granted or modified are as follows:

 

     2012     2011      2010  

Risk-free interest rate

      2.23 %      —           2.26 % 

Expected dividend yield

      2.00 %      —           2.00 % 

Expected volatility

      43 %      —           35 % 

Expected time until exercise

      4.5 years        —           4 years   
  

 

 

    

 

 

     

 

 

  

Weighted average fair value of options granted or modified in year [Cdn$]

    $ 15.37      $ —         $ 10.00   
  

 

 

    

 

 

     

 

 

  
Schedule of reduction in stated value of company's common shares

The following is a continuity of the stock that has not been released to the executives and is reflected as a reduction in the stated value of the Company’s Common Shares [number of Common Shares in the table below are expressed in whole numbers]:

 

     Number
of shares		     Stated
value		  

Awarded and not released, December 31, 2009

      1,371,978      $ 45   

Release of restricted stock

      (189,242 )      (5 ) 
  

 

 

    

 

 

  

Awarded and not released, December 31, 2010

      1,182,736        40   

Release of restricted stock

      (156,432 )      (5 ) 
  

 

 

    

 

 

  

Awarded and not released, December 31, 2011

      1,026,304        35   

Release of restricted stock

      (143,316 )      (5 ) 
  

 

 

    

 

 

  

Awarded and not released, December 31, 2012

      882,988      $ 30   
  

 

 

    

 

 

  
Schedule of restricted stock unit programs outstanding

The following is a continuity schedule of restricted stock unit programs outstanding [number of stock units in the table below are expressed in whole numbers]:

 

     Equity
classified
RSUs		     Liability
classified
RSUs		     Liability
classified
DSUs		     Total  

Outstanding at December 31, 2009

      184,084        12,272        153,013        349,369   

Granted

      20,940        26,000        40,954        87,894   

Dividend equivalents

      946        391        1,758        3,095   

Redeemed

      (24,238 )      (4,421 )      (9,377 )      (38,036 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding at December 31, 2010

      181,732        34,242        186,348        402,322   

Granted

      208,458        4,150        22,669        235,277   

Dividend equivalents

      2,022        946        4,696        7,664   

Redeemed

      (24,486 )      (9,532 )      (15,267 )      (49,285 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding at December 31, 2011

      367,726        29,806        198,446        595,978   

Granted

      320,131        15,364        37,456        372,951   

Dividend equivalents

      1,895        1,133        5,145        8,173   

Redeemed

      (84,322 )      (26,204 )      (34,124 )      (144,650 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding at December 31, 2012

      605,430        20,099        206,923        832,452   
  

 

 

    

 

 

    

 

 

    

 

 

  
Summary of Stock-based compensation expense recorded in selling, general and administrative expenses

Stock-based compensation expense recorded in selling, general and administrative expenses related to the above programs is as follows:

 

     2012      2011     2010  

Incentive Stock Option Plan [i]

    $ 19       $ 21      $ 43   

Long-term retention

      5         7        9   

Restricted stock unit

      14         6        1   
  

 

 

     

 

 

    

 

 

  
     38         34        53   

Fair value adjustment for liability classified DSUs

      4         (3 )      4   
  

 

 

     

 

 

    

 

 

  

Incentive Stock Option Plan

    $ 42       $ 31      $ 57   
  

 

 

     

 

 

    

 

 

  

 

[i] During 2010, option agreements with three departing executives were modified resulting in a one-time charge to compensation expense of $20 million. These charges represent the fair value of the options at the date of modification net of originally measured compensation cost which was reversed.