STOCK BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
STOCK BASED COMPENSATION | ' |
STOCK BASED COMPENSATION |
At March 31, 2014, we had the following stock option and stock purchase plans: |
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• | the 2011 Incentive Stock Plan, which our stockholders approved in May 2011; | | | | | | | | | | | | |
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• | the 2008 Incentive Stock Plan, which our stockholders approved in May 2008; | | | | | | | | | | | | |
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• | the 2005 Incentive Stock Plan, which our stockholders approved in April 2005; | | | | | | | | | | | | |
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• | the 2000 Nonstatutory Stock Option Plan, which expired in February 2010; | | | | | | | | | | | | |
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• | the 1997 Stock Option Plan, which expired in January 2007; | | | | | | | | | | | | |
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• | the 1996 Directors Stock Option Plan, which expired in May 2006; and | | | | | | | | | | | | |
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• | the Employee Stock Purchase Plan (“ESPP”), which our stockholders approved in May 2001. | | | | | | | | | | | | |
Stock-Based Compensation Expense: |
The following table presents the total stock-based compensation expense resulting from stock option awards, restricted stock units (“RSUs”), and the ESPP included in the Condensed Consolidated Statements of Income: |
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In thousands | | | | | |
| | Three Months Ended March 31, | | | | | |
| | 2014 | | 2013 | | | | | |
Cost of revenues – stock option plan | | $ | 7 | | | $ | 40 | | | | | | |
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Selling, general and administrative – stock option plan | | 4,041 | | | 3,530 | | | | | | |
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Selling, general and administrative – RSUs | | 315 | | | 195 | | | | | | |
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Selling, general and administrative – ESPP | | 309 | | | 282 | | | | | | |
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Total pre-tax expense | | $ | 4,672 | | | $ | 4,047 | | | | | | |
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The following table sets forth the tax benefits related to stock compensation: |
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In thousands | | | | | |
| | Three Months Ended March 31, | | | | | |
| | 2014 | | 2013 | | | | | |
Tax benefit recognized in Statement of Income | | $ | 909 | | | $ | 1,130 | | | | | | |
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Excess tax benefit realized | | 3,734 | | | 4,203 | | | | | | |
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Stock Options: |
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Stock option activity for the three months ended March 31, 2014, is summarized as follows: |
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| | Number of | | Weighted | | Weighted Average Remaining Contractual Life | | Total Aggregate Intrinsic Value |
Options | Average |
| Exercise |
| Price per |
| Share |
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Outstanding at beginning of year | | 5,540,482 | | | $ | 70.29 | | | | | |
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Granted | | 854,778 | | | 115.7 | | | | | |
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Exercised | | (182,867 | ) | | 51.61 | | | | | |
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Forfeited | | (28,088 | ) | | 84.58 | | | | | |
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Canceled or expired | | (1,049 | ) | | 65.11 | | | | | |
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Outstanding at March 31, 2014 | | 6,183,256 | | | $ | 77.06 | | | 6.59 | | $ | 227,883 | |
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Exercisable at March 31, 2014 | | 3,417,439 | | | $ | 62.02 | | | 5.54 | | $ | 176,414 | |
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Vested and expected to vest at March 31, 2014 | | 5,884,031 | | | $ | 75.89 | | | | | |
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As of March 31, 2014, there was $42.0 million of total unrecognized compensation expense related to non-vested option awards, which is expected to be recognized over a weighted average period of 3.46 years. |
The total exercise intrinsic value represents the total pre-tax value (the difference between the sales price on that trading day in the quarter ended March 31, and the exercise price associated with the respective option). |
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In thousands | | | | | |
| | Three Months Ended March 31, | | | | | |
| | 2014 | | 2013 | | | | | |
Total intrinsic value of options exercised | | $ | 11,796 | | | $ | 14,562 | | | | | | |
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The Company uses historical data to estimate expected life and volatility. The estimated fair value of stock options at the time of the grant using the Black-Scholes model option pricing model was as follows: |
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| | Three Months Ended March 31, | | | | | |
| | 2014 | | 2013 | | | | | |
Stock options granted (shares) | | 854,778 | | | 977,090 | | | | | | |
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Weighted average fair value at grant date | | $ | 21.28 | | | $ | 21.57 | | | | | | |
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Assumptions: | | | | | | | | | |
Expected term (in years) | | 4.78 | | | 6 | | | | | | |
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Expected volatility | | 17.68 | % | | 27.1 | % | | | | | |
Expected dividend yield | | — | % | | — | % | | | | | |
Risk free interest rate | | 1.45 | % | | 0.99 | % | | | | | |
Restricted Stock Units: |
Restricted stock units ("RSUs") vest at the end of three or five years. Our 2008 and 2011 Plans include a share reserve related to RSUs granted at a 2-1 ratio. |
A summary of the status of our non-vested RSUs and changes during the three months ended March 31, 2014, are as follows: |
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| | Number of | | Weighted Average Grant Date Fair Value | | Total Aggregate Intrinsic Value | | |
Units | | |
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Non-vested at beginning of year | | 70,457 | | | $ | 88.32 | | | | | |
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Granted | | 16,084 | | | 115.69 | | | | | |
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Vested and released | | (17,288 | ) | | 85 | | | | | |
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Forfeited | | (5,383 | ) | | 88.1 | | | | | |
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Non-vested at March 31, 2014 | | 63,870 | | | $ | 96.13 | | | $ | 7,257 | | | |
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As of March 31, 2014, there was $5.1 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 3.62 years. |