Note 10. Common Stock and Earnings Per Share

6 Months Ended

Feb. 29, 2012

Earnings Per Share [Text Block]

10. COMMON STOCK AND EARNINGS PER SHARE

On February 14, 2012, the Company’s Board of Directors approved a regular quarterly dividend of $0.27 per share, or $1.08 per share per annum. The cash dividend of $12.1 million was paid on March 20, 2012, to common stockholders of record on February 29, 2012. Shares of common stock outstanding were as follows (in thousands):

	Six Months Ended
	Feb 29, 2012			Feb 28, 2011
Balance at September 1		45,055			46,024
Common stock issued for employee stock plans		364			925
Repurchase of common stock		(658	)		(809	)
Balance at February 29, 2012 and February 28, 2011, respectively		44,761			46,140

Earnings per Share

Basic earnings per share (“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. Under the treasury stock method, the exercise price paid by the optionee, future stock-based compensation expense that the Company has not yet recognized and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

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 February 29, 2012
Basic EPS
Income available to common stockholders	$	46,746		44,880	$	1.04
Diluted EPS
Dilutive effect of stock options and restricted stock				827
Income available to common stockholders plus assumed conversions	$	46,746		45,707	$	1.02
For the three months ended February 28, 2011
Basic EPS
Income available to common stockholders	$	45,254		46,226	$	0.98
Diluted EPS
Dilutive effect of stock options and restricted stock				1,201
Income available to common stockholders plus assumed conversions	$	45,254		47,427	$	0.95
For the six months ended February 29, 2012
Basic EPS
Income available to common stockholders	$	92,290		44,993	$	2.05
Diluted EPS
Dilutive effect of stock options and restricted stock				979
Income available to common stockholders plus assumed conversions	$	92,290		45,972	$	2.01
For the six months ended February 28, 2011
Basic EPS
Income available to common stockholders	$	86,855		46,244	$	1.88
Diluted EPS
Dilutive effect of stock options and restricted stock				1,251
Income available to common stockholders plus assumed conversions	$	86,855		47,495	$	1.83

Dilutive potential common shares consist of stock options and unvested restricted stock awards. The number of stock options excluded from the calculation of diluted earnings per share for the three and six months ended February 29, 2012 was 440,515 and 300,651, respectively, because their inclusion would have been anti-dilutive. No stock options were excluded from the calculation of diluted earnings per share for the three months ended February 28, 2011. However, 4,838 stock options were excluded for the six months ended February 28, 2011. The number of restricted stock awards excluded from the calculation of diluted earnings per share for the three months ended February 29, 2012 and February 28, 2011 was 30,090 and 183, respectively, because their inclusion would have been anti-dilutive. For the six months ended February 29, 2012 and February 28, 2011, the number of restricted stock awards excluded was 30,090 and 92, respectively.

For the three and six months ended February 29, 2012, the number of performance-based stock option grants excluded from the calculation of diluted earnings per share was 2,323,117. Similarly, 2,531,598 performance-based stock option grants were excluded from the calculation of diluted earnings per share for the three and six months ended February 28, 2011. 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 February 29, 2012 and February 28, 2011 for these performance-based stock options.