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49
As of December 31, 2006, there was $32.2 million of total unrecognized compensation cost
related to nonvested share-based compensation awards granted under our plans. That cost is
expected to be recognized over a weighted-average period of 3.81 years.
The Company has historically settled stock option exercises with newly issued common shares.
In April 2006, our Board of Directors authorized a new share repurchase program of up to
5,000,000 shares. This repurchase program is expected to remain in effect through April 2008
unless earlier terminated by the Board or completed.
Impact of Fair Value Recognition under SFAS 123 for the Years Ended December 31, 2004 and
2005
In periods prior to our adoption of SFAS 123R, net income and earnings per share amounts
reported in our consolidated statements of income did not include share-based compensation
expense for stock options and stock purchases under the ESPP because the Company opted to
continue using the recognition provisions of Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees” (“APB 25”) while providing required pro forma
disclosures under Statement of Financial Accounting Standards 123, “Accounting for Stock-Based
Compensation” (“SFAS 123”). The following table reflects the effect on net income and earnings
per share assuming the Company had elected to apply the fair value recognition provisions of SFAS
123 (in thousands, except per share amounts). The results for the years ended December 31, 2004
and 2005, have not been restated.
2005 2004
Net income, as reported $ 272,092 $ 241,445
Add share-based employee compensation expense
included in reported net income, net of related tax
effects 2,434 190
Deduct total share-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects (29,614) (26,795)
Pro forma net income $ 244,912 $ 214,840
Basic earnings per share, as reported $ 3.35 $ 2.90
Diluted earnings per share, as reported $ 3.26 $ 2.79
Pro forma basic earnings per share $ 3.02 $ 2.58
Pro forma diluted earnings per share $ 2.91 $ 2.47
The impact of accounting for share-based compensation under SFAS 123R for the year ended
December 31, 2006 was as follows (in thousands, except per share amounts):