Share-Based Compensation

3 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

14.    Share-Based Compensation

During the three months ended for both March 31, 2012 and 2011, the Company granted approximately 0.7 million stock options and 0.2 million unvested shares, respectively.

Weighted average option fair values and assumptions for the periods specified are disclosed in the following table:

	Three Months Ended March 31,
	2012	2011
Weighted average fair value of option grants	$11.47	$12.34
Dividend yield	1.57%	1.46%
Volatility	32.01%	32.76%
Risk-free forward interest rate	0.17% - 3.98%	0.28% - 5.62%
Expected life (in years)	5.98	6.18

The assumptions are as follows:

• The Company estimated volatility using its historical share price performance over the contractual term of the option.

• The Company uses historical data to estimate the expected life of the option. The expected life assumption for the three months ended March 31, 2012 and 2011 is an output of the Binomial lattice option-pricing model, which incorporates vesting provisions, rate of voluntary exercise and rate of post-vesting termination over the contractual life of the option to define expected employee behavior.

• The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option. For the three months ended March 31, 2012 and 2011, we present the range of risk-free one-year forward rates, derived from the U.S. treasury yield curve, utilized in the Binomial lattice option-pricing model.

• The expected dividend yield is based on the Company's current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.

The Company's policy is to recognize compensation cost on a straight-line basis over the requisite service period for the entire award. Additionally, the Company's general policy is to issue authorized and unissued shares of common stock to satisfy stock option exercises or grants of unvested shares.

Total compensation cost for the stock options is as follows:

	Three Months Ended March 31,
	2012			2011
	(In thousands)
Cost of goods sold	$	293		$	235
Selling, general and administrative expenses		1,966			2,053
Total expense before income taxes		2,259			2,288
Income tax benefit		(708	)		(736	)
Total expense after income taxes	$	1,551		$	1,552

Total compensation cost for the unvested shares is as follows:

	Three Months Ended March 31,
	2012			2011
	(In thousands)
Cost of goods sold	$	406		$	148
Selling, general and administrative expenses		1,996			2,413
Total expense before income taxes		2,402			2,561
Income tax benefit		(663	)		(504	)
Total expense after income taxes	$	1,739		$	2,057

Classification of stock compensation cost within the Consolidated Statements of Operations is consistent with classification of cash compensation for the same employees and $0.5 million of compensation cost was capitalized as part of inventory as of March 31, 2012, while $0.2 million was capitalized as of December 31, 2011.

As of March 31, 2012, there was $12.6 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.6 years, and $14.0 million of total unrecognized compensation cost related to unvested shares that is expected to be recognized over a weighted-average period of 1.3 years.