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Capital Stock (Disclosure)
3 Months Ended
Jan. 31, 2012
Capital Stock and Accelerated Share Repurchase [Abstract]  
Capital Stock and Accelerated Share Repurchase [Text Block]

5.              Capital Stock and Accelerated Share Repurchase

 

On January 4, 2012, we entered into an accelerated share repurchase (ASR) agreement where we purchased 800,000 shares of our common stock from an investment bank at the closing price that day of $33.77 per share. The settlement and retirement of those shares occurred on January 5, 2012. Total consideration paid to purchase the shares of $27 million was recorded in “Stockholders' equity” as a reduction in “Common stock” in the consolidated balance sheets.

 

As part of the ASR, we simultaneously entered into a forward sale contract with the investment bank that is expected to mature in 52 trading days, or March 21, 2012. Under the terms of the forward sale contract, the investment bank is required to purchase, in the open market, 800,000 shares of our common stock during the term of the contract to fulfill its obligation related to the shares it borrowed from third parties and sold to us. At settlement, we, at our option, are required to either pay cash or issue shares of our common stock to the investment bank if the investment bank's weighted average purchase price, less a $.09 per share discount, is higher than the January 4, 2012 closing price. The investment bank is required to pay us either cash or shares of our common stock, at our option, if the investment bank's weighted average price, less a $.09 per share discount, for the shares purchased is lower than the initial purchase closing price. We have accounted for this forward sale contract as an equity instrument under accounting guidelines. As the fair value of the forward sale contract at inception was zero, no accounting for the forward sale contract is required until settlement, as long as the forward sale continues to meet the requirements for classification as an equity instrument.

 

For further information on the subsequent settlement of the ASR by the investment bank on February 28, 2012, see Note 14 to the consolidated financial statements in this Form 10-Q.