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Stockholders' Equity
 12 Months Ended
Dec. 31, 2012
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Note 5. Stockholders’ Equity
Our authorized, issued, and, outstanding shares (stated in whole numbers) at year end consist of the following:

 
Par Value
 
2012
 
2011
Preferred Stock
.01/share
 
 
 
 
Authorized
 
 
5,000,000

 
5,000,000

Shares issued and outstanding
 
 
—

 
—

Common Stock
.01/share
 
 
 
 
Authorized
 
 
400,000,000

 
400,000,000

Shares issued and outstanding
 
 
296,564,382

 
295,258,674


Dividends
On January 16, 2013, our board of directors declared a quarterly dividend of $0.10 per share of common stock to be paid in cash on March 1, 2013 to shareholders of record at the close of business on February 1, 2013. We paid aggregate annual dividends per share of $1.24, $0.65, and $0.62 in 2012, 2011, and 2010, respectively.
Stock Options
The following tables summarize the details of grants made under our stock option plan that are still outstanding, and the assumptions used to value these grants. All options granted were effective at the close of business on the date of grant.
 
  
Options
granted
 
Option exercise
(strike) price
 
Closing stock
price on date
of grant
 
December 31, 2012
Date of grant
Options
outstanding
 
Options
vested
April 17, 2012
1,235,000

 
$
54.00

 
$
49.01

 
1,177,500

 
—

April 19, 2011
410,000

 
$
35.00

 
$
31.78

 
380,000

 
—

April 20, 2010
530,000

 
$
30.00

 
$
27.13

 
380,000

 
—

April 21, 2009
790,000

 
$
27.00

 
$
17.61

 
540,000

 
—

April 15, 2008
550,000

 
$
27.00

 
$
24.35

 
286,167

 
116,167

April 17, 2007
4,380,000

 
$
22.50

 
$
20.15

 
2,072,125

 
1,052,625

Total
7,895,000

 
 
 
 
 
4,835,792

 
1,168,792

 
Date of grant
Risk-free
interest rate
 
Expected life
of option in
years
 
Expected
dividend
yield
 
Expected
stock
volatility
 
Estimated fair
value of stock
option
April 17, 2012
0.9
%
 
5.00

 
1.4
%
 
39.25
%
 
$
13.69

April 19, 2011
2.1
%
 
5.00

 
1.6
%
 
39.33
%
 
$
11.20

April 20, 2010
2.6
%
 
5.00

 
1.5
%
 
39.10
%
 
$
8.14

April 21, 2009
1.9
%
 
5.00

 
1.0
%
 
38.80
%
 
$
3.64

April 15, 2008
2.7
%
 
5.00

 
1.0
%
 
30.93
%
 
$
7.75

April 17, 2007
4.6
%
 
4.85

 
1.0
%
 
31.59
%
 
$
5.63


All of the options in the tables above vest and become exercisable over a period of up to eight years. Each option will terminate, to the extent not previously exercised, 13 months after the end of the relevant vesting period.
The fair value of each share-based option was estimated on the date of grant using a Black-Scholes valuation method that uses the assumptions listed above. The expected life is the average length of time over which we expect the employee groups will exercise their options, which is based on historical experience with similar grants. Expected volatilities are based on the movement of our stock over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate is based on the U.S. Treasury rate over the expected life at the time of grant. The dividend yield is estimated over the expected life based on our current dividend payout, historical dividends paid, and expected future cash dividends.
A summary of the activity under our stock option plan is as follows:
 
Options
outstanding
 
Exercise
Price1
 
Remaining
Life2
Outstanding as of January 1, 2012
5,132,750

 
$
24.92

 
4.72

Granted
1,235,000

 
$
54.00

 
8.41

Exercised/earned
(1,305,708
)
 
$
22.70

 
 
Cancelled/forfeited
(226,250
)
 
$
34.12

 
 
Outstanding as of December 31, 2012
4,835,792

 
$
32.51

 
5.40

Exercisable as of December 31, 2012
1,168,792

 
$
22.95

 
3.45

 
 
Options
outstanding
 
Exercise
Price1
 
Remaining
Life2
Outstanding as of January 1, 2011
5,320,000

 
$
24.03

 
5.50

Granted
410,000

 
$
35.00

 
7.93

Exercised/earned
(397,250
)
 
22.50

 
 
Cancelled/forfeited
(200,000
)
 
$
26.78

 
 
Outstanding as of December 31, 2011
5,132,750

 
$
24.92

 
4.72

Exercisable as of December 31, 2011
1,852,750

 
$
22.50

 
3.16

1 
Weighted-average exercise price
2 
Weighted-average remaining contractual life in years
The total intrinsic value of stock options exercised during the years ended December 31, 2012, 2011, and 2010 was $34,424, $4,977, and $0, respectively. The intrinsic value represents the difference between the exercise price and fair value of the underlying shares at a specified date.
At December 31, 2012, there was $20,131 of total unrecognized compensation cost related to unvested stock options granted under the plan. The cost is expected to be recognized over a weighted average period of 4.69 years. The total fair value of shares vested under our stock option plan during 2012, 2011, and 2010 was $3,866, $9,168, and $1,125, respectively.
Total stock-based compensation expense related to our stock option plan was $4,800, $4,050, and $4,030 for 2012, 2011, and 2010, respectively.
Earnings Per Share
The following tables present a reconciliation of the denominators used in the computation of basic and diluted earnings per share and a summary of the options to purchase shares of common stock which were excluded from the diluted earnings calculation because they were anti-dilutive:
 
Reconciliation
2012
 
2011
 
2010
Basic-weighted average shares outstanding
296,089,348

 
295,053,790

 
294,861,424

Weighted shares assumed upon exercise of stock options
1,061,602

 
814,936

 
—

Diluted-weighted average shares outstanding
297,150,950

 
295,868,726

 
294,861,424


 
Summary of anti-dilutive options excluded
2012
 
2011
 
2010
Options to purchase shares of common stock
847,254

 
704,384

 
5,328,246

Weighted-average exercise prices of options
$
54.00

 
32.05

 
23.94


Any dilutive impact summarized above would relate to periods when the average market price of our stock exceeded the exercise price of the potentially dilutive option securities then outstanding.