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Accounting for
Stock-Based Compensation
The
Company applies Accounting Principles Board Opinion No. 25, “Accounting
for Stock Issued to Employees,” and related Interpretations
in accounting for stock-based compensation plans. The compensation cost
charged against income for the Long-Term Equity Incentive Plan, Long-Term
Incentive Stock Plan, Employee Stock Purchase Plans and retirement savings
plans approximated $9.4 million, $11.2 million and $12.5 million in
2001, 2000 and 1999, respectively. No other compensation costs have
been recognized under our stock-based compensation plans. Had compensation
cost for awards under our stock-based compensation plans been determined
using the fair value method prescribed by SFAS No. 123, “Accounting
for Stock-Based Compensation,” our net earnings and earnings
per share would have been reduced to the pro forma amounts presented
below:
The fair value
of each stock option granted is established on the date of the grant
using the Black-Scholes option pricing model with the following weighted
average assumptions for grants in 2001, 2000, and 1999:
- Expected volatility
rates of 40% for 2001, 40% for 2000 and 35% for 1999
- Risk-free interest
rates of 4.58% for 2001, 6.37% for 2000 and 5.84% for 1999
- Expected lives
of 4.9, 5.6 and 5.6 years for 2001, 2000 and 1999, respectively
- A dividend yield
of zero for all three years
A summary of the
status of and changes in our stock option plans for the last three years
is presented below.
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