Accounting For Stock-Based Compensation

9 Months Ended

Apr. 30, 2012

Accounting For Stock-Based Compensation [Abstract]

Accounting For Stock-Based Compensation

Note D – Accounting for Stock-Based Compensation

Stock-based employee compensation cost is recognized using the fair-value based method for all awards. The Company determined the fair value of its option awards using the Black-Scholes option pricing model. The following assumptions were used to value the options, including reload options which generally have a shorter contractual life, granted during the nine months ended April 30, 2012: range of 1 year to 8 years expected life; expected volatility range of 25.8 percent to 31.9 percent; risk-free interest rate range of 0.10 percent to 1.80 percent; and annual dividend yield of 1.0 percent. The expected life selected for options granted during the period represents the period of time that the options are expected to be outstanding based on the contractual life and historical data of option holder exercise and termination behavior. Expected volatilities are based upon historical volatility of the Company's stock over a period at least equal to the expected life of each option grant. Option grants are priced at the fair market value of the Company's stock on the date of grant. The weighted average fair value for options granted during the nine months ended April 30, 2012 and 2011 was $9.38 per share and $8.63 per share, respectively. For the three and nine months ended April 30, 2012, the Company recorded pretax compensation expense associated with stock options of $1.3 million and $6.4 million, respectively, and recorded $0.5 million and $2.4 million of related tax benefit. For the three and nine months ended April 30, 2011, the Company recorded pretax compensation expense associated with stock options of $0.8 million and $5.6 million, respectively, and recorded $0.3 million and $2.1 million of related tax benefit.

The following table summarizes stock option activity during the nine months ended April 30, 2012:

	Options Outstanding			Weighted Average Exercise Price
Outstanding at July 31, 2011		8,387,994		$	17.72
Granted		1,074,909			34.77
Exercised		(1,281,456	)		11.66
Canceled		(29,820	)		26.91
Outstanding at April 30, 2012		8,151,627			20.89

The total intrinsic value of options exercised during the nine months ended April 30, 2012 and 2011 was $27.6 million and $27.9 million, respectively.

The following table summarizes information concerning outstanding and exercisable options as of April 30, 2012:

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$8.50 to $12.50		441,800		0.61	$	8.93		441,800	$	8.93
$12.51 to $16.50		2,502,260		2.51		15.32		2,502,260		15.32
$16.51 to $20.50		1,610,224		5.43		17.76		1,598,714		17.77
$20.51 to $24.50		1,551,370		6.93		21.78		1,380,234		21.85
$24.51 and above		2,045,973		8.87		32.07		418,223		29.99
		8,151,627		5.42		20.89		6,341,231		17.88

At April 30, 2012, the aggregate intrinsic value of options outstanding and exercisable was $116.3 million and $109.5 million, respectively.

As of April 30, 2012, there was $9.5 million of total unrecognized compensation cost related to non-vested stock options granted under the 2001 and 2010 Master Stock Incentive Plans. This unvested cost is expected to be recognized during the remainder of Fiscal Years 2012, 2013, 2014, and 2015.