Note 5. Stockholders' Equity

Dividends

On January 16, 2018, our board of directors declared a quarterly dividend of $0.37 per share of common stock to be paid in cash on February 27, 2018 to shareholders of record at the close of business on January 31, 2018. We paid aggregate annual dividends per share of $1.28, $1.20, and $1.12 in 2017, 2016, and 2015, respectively.

Stock Options

Effective January 2, 2018, the compensation committee of our board of directors granted to our employees options to purchase a total of 520,601 shares of our common stock at an exercise strike price of $55.00 per share. The closing stock price on the effective date of the grant was $54.54 per share. On the same date, certain of our non-employee directors elected to forgo all or a portion of the 2018 annual cash retainer in exchange for options to acquire a total of 21,185 shares of our common stock at an exercise price of $55.00 per share. These options are subject to shareholder approval of the non-employee director stock option plan at our annual meeting of shareholders to be held in April 2018.

The following tables summarize the details of options granted under our stock option plan that were still outstanding as of December 31, 2017, and the assumptions used to value those grants. All such grants were effective at the close of business on the date of grant.



	Options Granted	Option Exercise (Strike) Price		Closing Stock Price on Date of Grant		December 31, 2017
Date of Grant	Options Granted	Option Exercise (Strike) Price		Closing Stock Price on Date of Grant		Options Outstanding	Options Exercisable
January 3, 2017	764,789	$	47.00	$	46.95	713,097	—
April 19, 2016	845,440	$	46.00	$	45.74	738,611	—
April 21, 2015	893,220	$	42.00	$	41.26	674,499	142,072
April 22, 2014	955,000	$	56.00	$	50.53	567,500	158,750
April 16, 2013	205,000	$	54.00	$	49.25	101,750	55,250
April 17, 2012	1,235,000	$	54.00	$	49.01	952,001	772,977
April 19, 2011	410,000	$	35.00	$	31.78	60,350	35,350
April 20, 2010	530,000	$	30.00	$	27.13	79,550	54,550
April 21, 2009	790,000	$	27.00	$	17.61	61,550	61,550
Total	6,628,449					3,948,908	1,280,499



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
January 3, 2017	1.9	%	5.00	2.6	%	24.49	%	$	8.40
April 19, 2016	1.3	%	5.00	2.6	%	26.34	%	$	8.18
April 21, 2015	1.3	%	5.00	2.7	%	26.84	%	$	7.35
April 22, 2014	1.8	%	5.00	2.0	%	28.55	%	$	9.57
April 16, 2013	0.7	%	5.00	1.6	%	37.42	%	$	12.66
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

All of the options in the tables above vest and become exercisable over a period of up to eight years. Generally, each option will terminate approximately nine years after the grant date.

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 risk-free interest rate is based on the U.S. Treasury rate over the expected life of the option at the time of grant. 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. The dividend yield is estimated over the expected life of the option based on our current dividend payout, historical dividends paid, and expected future cash dividends. Expected stock volatilities are based on the movement of our stock price over the most recent historical period equivalent to the expected life of the option.

A summary of activities under our stock option plan consisted of the following:



	Options Outstanding		Exercise Price⁽¹⁾		Remaining Life⁽²⁾
Outstanding as of January 1, 2017	3,757,947		$	46.81	5.85
Granted	764,789		$	47.00	9.00
Exercised	(329,612	)	$	28.59
Cancelled/forfeited	(244,216	)	$	48.22
Outstanding as of December 31, 2017	3,948,908		$	48.28	5.89
Exercisable as of December 31, 2017	1,280,499		$	50.07	3.78



	Options Outstanding		Exercise Price⁽¹⁾		Remaining Life⁽²⁾
Outstanding as of January 1, 2016	4,530,982		$	41.49	4.89
Granted	845,440		$	46.00	8.41
Exercised	(1,180,242	)	$	24.80
Cancelled/forfeited	(438,233	)	$	49.49
Outstanding as of December 31, 2016	3,757,947		$	46.81	5.85
Exercisable as of December 31, 2016	1,200,250		$	45.93	3.74

⁽¹⁾Weighted average exercise price.

⁽²⁾Weighted average remaining contractual life in years.

The total intrinsic value of stock options exercised during the years ended December 31, 2017, 2016, and 2015 was $6.9, $23.2, and $14.2, respectively. The intrinsic value represents the difference between the exercise price and fair value of the underlying shares at the date of exercise.

At December 31, 2017, there was $14.6 of total unrecognized stock-based compensation expense related to outstanding unvested stock options granted under the plan. This expense is expected to be recognized over a weighted average period of 4.16 years. Any future change in estimated forfeitures will impact this amount. The total grant date fair value of stock options vested under our stock option plan during 2017, 2016, and 2015 was $4.2, $7.1, and $5.1, respectively.

Total stock-based compensation expense related to our stock option plan was $5.2, $4.1, and $5.8 for 2017, 2016, and 2015, respectively.

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:



Reconciliation	2017	2016	2015
Basic weighted average shares outstanding	288,208,435	288,949,525	291,453,107
Weighted shares assumed upon exercise of stock options	134,298	207,998	592,335
Diluted weighted average shares outstanding	288,342,733	289,157,523	292,045,442



Summary of Anti-dilutive Options Excluded	2017		2016	2015
Options to purchase shares of common stock	3,524,401		3,095,343	2,611,367
Weighted average exercise prices of options	$	49.85	50.09	51.89

Any dilutive impact summarized above related to periods when the average market price of our stock exceeded the exercise price of the potentially dilutive stock options then outstanding.