Common Stock and Earnings Per Share

9 Months Ended

May 31, 2011

Common Stock and Earnings Per Share

Common Stock and Earnings Per Share

10. COMMON STOCK AND EARNINGS PER SHARE

On May 9, 2011, the Company's Board of Directors approved a 17% increase in the regular quarterly dividend, beginning with the Company's dividend payment in June 2011 of $0.27 per share, or $1.08 per share per annum. The cash dividend of $12.3 million was paid on June 21, 2011, to common stockholders of record on May 31, 2011. Shares of common stock outstanding were as follows (in thousands):

	Nine Months Ended May  31,
	2011			2010
Balance at September 1		46,024			46,740
Common stock issued for employee stock plans		1,168			1,829
Repurchase of common stock		(1,362	)		(2,243	)
Balance at May 31		45,830			46,326

Earnings per Share

Basic EPS is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period increased by the dilutive effect of potential common shares outstanding during the period.

The number of potential common shares outstanding has been determined in accordance with the treasury stock method to the extent they are dilutive. Common share equivalents consist of common shares issuable upon the exercise of outstanding share-based compensation awards, including employee stock options and restricted stock.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share computations is as follows (in thousands, except per share data):

	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
For the three months ended May 31, 2011
Basic EPS
Income available to common stockholders	$	43,311		45,969	$	0.94
Diluted EPS
Dilutive effect of stock options and restricted stock				1,185
Income available to common stockholders plus assumed conversions	$	43,311		47,154	$	0.92
For the three months ended May 31, 2010
Basic EPS
Income available to common stockholders	$	38,658		46,544	$	0.83
Diluted EPS
Dilutive effect of stock options and restricted stock				1,181
Income available to common stockholders plus assumed conversions	$	38,658		47,725	$	0.81
For the nine months ended May 31, 2011
Basic EPS
Income available to common stockholders	$	130,166		46,145	$	2.82
Diluted EPS
Dilutive effect of stock options and restricted stock				1,273
Income available to common stockholders plus assumed conversions	$	130,166		47,418	$	2.75
For the nine months ended May 31, 2010
Basic EPS
Income available to common stockholders	$	110,920		46,872	$	2.37
Diluted EPS
Dilutive effect of stock options and restricted stock				1,311
Income available to common stockholders plus assumed conversions	$	110,920		48,183	$	2.30

Dilutive potential common shares consist of stock options and unvested restricted stock awards. No stock options were excluded from the calculation of diluted earnings per share for the three months ended May 31, 2011 and for the three and nine months ended May 31, 2010. However, for the nine months ended May 31, 2011, there were 1,424 stock options excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. No restricted stock awards were excluded from the calculation of diluted earnings per share for the three months ended May 31, 2011 and for the three and nine months ended May 31, 2010. However, for the nine months ended May 31, 2011, there were 5,015 restricted stock awards excluded from the calculation of diluted earnings per share.

For the three and nine months ended May 31, 2011, the number of performance-based stock option grants excluded from the calculation of diluted earnings per share was 2,514,891. Similarly, 1,878,408 performance-based stock option grants were excluded from the calculation of diluted earnings per share for the three and nine months ended May 31, 2010. Performance-based stock options should be omitted from the calculation of diluted earnings per share until the performance criteria have been met. The criteria had not yet been met at May 31, 2011 and 2010 for performance-based stock options granted in fiscal 2011 and 2010.