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STOCK-BASED COMPENSATION
 6 Months Ended
May 31, 2012
STOCK-BASED COMPENSATION
6. STOCK-BASED COMPENSATION

The following table sets forth the stock-based compensation recorded in selling, general and administrative (SG&A) expense (in millions):

 

    

Three months ended

May 31,

      Six months ended
May 31,		  
     2012      2011      2012      2011  

Stock-based compensation expense

    $ 6.1       $ 5.5       $ 8.7       $ 7.6   

Our 2012 annual grant of stock options and restricted stock units (RSU) occurred in the second quarter, similar to the 2011 annual grant. The weighted-average grant-date fair value of an option granted in 2012 was $7.17 and in 2011 was $7.99 as calculated under a lattice pricing model. The fair values of option grants in the stated periods were computed using the following range of assumptions for our various stock compensation plans:

 

     2012   2011

Risk-free interest rates

    0.1 - 2.2%   0.1 - 3.5%

Dividend yield

    2.3%   2.4%

Expected volatility

    16.5 - 21.6%   15.2 - 22.2%

Expected lives

    6.1   6.4

The following is a summary of all option activity for the six months ended May 31, 2012 and 2011:

 

     2012      2011  
(shares in millions)    Number
of
Shares		     Weighted-
Average
Exercise
Price		      Number
of
Shares		     Weighted-
Average
Exercise
Price		  

Outstanding at beginning of period

      6.6      $ 34.98         7.4      $ 32.01   

Granted

      0.8        54.24         0.9        47.40   

Exercised

      (1.0 )      28.46         (1.0 )      28.11   
  

 

 

       

 

 

    

Outstanding at end of May

      6.4        38.71         7.3        34.62   
  

 

 

       

 

 

    

Exercisable at end of May

      4.1      $ 34.56         5.0      $ 32.11   
  

 

 

       

 

 

    

As of May 31, 2012 the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $113.1 million and for exercisable options was $89.3 million. The total intrinsic value of all options exercised during the six months ended May 31, 2012 and 2011 was $32.0 million and $19.6 million, respectively.

The following is a summary of all of our RSU activity for the six months ended May 31, 2012 and 2011:

 

     2012      2011  
(shares in thousands)    Number
of
Shares		     Weighted-
Average
Grant-Date
Fair Value		      Number
of
Shares		     Weighted-
Average
Grant-Date
Fair Value		  

Outstanding at beginning of period

      233      $ 43.23         289      $ 35.42   

Granted

      112        54.24         134        47.40   

Vested

      (146 )      42.78         (183 )      34.03   

Forfeited

      (5 )      46.09         (3 )      37.20   
  

 

 

       

 

 

    

Outstanding at end of period

      194      $ 49.86         237      $ 43.24