Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity

(3) Stockholders’ Equity – See note (1) regarding our stock split.

Our authorized and issued shares (share amounts stated in whole numbers) consist of the following:

			June 30,		December 31,		June 30,
	Par Value		2012		2011		2011
Preferred Stock	$	.01/share
Shares authorized				5,000,000		5,000,000		5,000,000
Shares issued				0		0		0
Common Stock	$	.01/share
Shares authorized				400,000,000		400,000,000		400,000,000
Shares issued				296,150,999		295,258,674		295,099,324

Dividends

On July 11, 2012, our board of directors declared a dividend of $0.19 per share of common stock. This dividend is to be paid in cash on August 24, 2012 to shareholders of record at the close of business on July 27, 2012. Historically, we have paid semi-annual dividends, which were typically paid in the first and third quarters. In 2010 and 2008, we paid a supplemental dividend in the fourth quarter. In 2011, our board of directors declared a semi-annual dividend in January, and then switched to a quarterly dividend in April, July, and October. Our board of directors expect to continue paying quarterly dividends, provided the future determination as to payment of dividends will depend on the financial needs of the Company and such other factors as deemed relevant by the board of directors.

The following table presents the dividends paid previously and declared by our board of directors for future payment by quarter:

	2012		2011
First quarter	$	0.17		0.25
Second quarter	$	0.17		0.13
Third quarter	$	0.19		0.13
Fourth quarter	$			0.14
Total	$	0.53		0.65

Stock Options

On April 17, 2012, the compensation committee of our board of directors approved and our board of directors ratified the grant under our employee stock option plan, effective at the close of business that day, of options to purchase approximately 1.2 million shares of our common stock at a strike price of $54.00 per share. The closing stock price on the date of grant was $49.01 per share.

The following tables summarize the details of grants made under our stock option plan of options that have been granted and are outstanding, and the assumptions used to value these options. All options granted were effective at the close of business on the date of grant.

			Option		Closing
			exercise		stock price		June 30, 2012
	Options		(strike)		on date		Options		Options
Date of grant	granted		price		of grant		outstanding		vested
April 17, 2012		1,235,000	$	54.00	$	49.01		1,207,500		0
April 19, 2011		410,000	$	35.00	$	31.78		400,000		0
April 20, 2010		530,000	$	30.00	$	27.13		380,000		0
April 21, 2009		790,000	$	27.00	$	17.61		590,000		0
April 15, 2008		550,000	$	27.00	$	24.35		322,450		147,450
April 17, 2007		4,380,000	$	22.50	$	20.15		2,491,725		1,420,725
Total		7,895,000						5,391,675		1,568,175

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 is 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.

Compensation expense equal to the grant date fair value is recognized for all of these awards over the vesting period. The stock-based compensation expense for the six month periods ended June 30, 2012 and 2011 was $2,100 and $1,800, respectively. Unrecognized compensation expense related to outstanding stock options as of June 30, 2012 was $22,852 and is expected to be recognized over a weighted average period of 5.08 years. Any future changes in estimated forfeitures will impact this amount.

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:

	Six-month period				Three-month period
Reconciliation	2012		2011		2012		2011
Basic-weighted average shares outstanding		295,826,501		294,917,946		296,110,167		294,973,572
Weighted shares assumed upon exercise of stock options		1,194,737		771,717		1,019,731		942,044
Diluted-weighted average shares outstanding		297,021,238		295,689,663		297,129,898		295,915,616

	Six-month period				Three-month period
Summary of anti-dilutive options excluded	2012		2011		2012		2011
Options to purchase shares of common stock		501,566		588,785		1,353,132		740,879
Weighted-average exercise price of options	$	54.00	$	31.37	$	49.09	$	32.17

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.