STOCK BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
STOCK BASED COMPENSATION | ' |
STOCK BASED COMPENSATION |
At June 30, 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 June 30, | | Six Months Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Cost of revenues – stock option plan | | $ | 21 | | | $ | 30 | | | $ | 28 | | | $ | 70 | |
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Selling, general and administrative – stock option plan | | 3,818 | | | 3,174 | | | 7,859 | | | 6,704 | |
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Selling, general and administrative – RSUs | | 314 | | | 383 | | | 629 | | | 578 | |
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Selling, general and administrative – ESPP | | 299 | | | 309 | | | 608 | | | 591 | |
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Total pre-tax expense | | $ | 4,452 | | | $ | 3,896 | | | $ | 9,124 | | | $ | 7,943 | |
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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 June 30, | | Six Months Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Tax benefit recognized in Statement of Income | | $ | 1,020 | | | $ | 1,254 | | | $ | 1,929 | | | $ | 2,384 | |
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Excess tax benefit realized | | 3,346 | | | 4,170 | | | 7,080 | | | 8,373 | |
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Stock Options: |
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Stock option activity for the six months ended June 30, 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 | | 963,483 | | | 115.29 | | | | | | | | |
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Exercised | | (424,881 | ) | | 53.82 | | | | | | | | |
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Forfeited | | (62,170 | ) | | 92.48 | | | | | | | | |
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Canceled or expired | | (1,108 | ) | | 66.74 | | | | | | | | |
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Outstanding at June 30, 2014 | | 6,015,806 | | | $ | 78.43 | | | 6.44 | | $ | 240,554 | | | | |
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Exercisable at June 30, 2014 | | 3,242,027 | | | $ | 63.26 | | | 5.38 | | $ | 178,818 | | | | |
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Vested and expected to vest at June 30, 2014 | | 5,741,157 | | | $ | 77.35 | | | | | | | | |
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As of June 30, 2014, there was $53.8 million of total unrecognized compensation expense related to non-vested option awards, which is expected to be recognized over a weighted average period of 3.29 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 June 30, and the exercise price associated with the respective option). |
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In thousands |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Total intrinsic value of options exercised | | $ | 14,721 | | | $ | 13,166 | | | $ | 26,517 | | | $ | 27,729 | |
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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 June 30, | | Six Months Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Stock options granted (shares) | | 108,705 | | | 68,040 | | | 963,483 | | | 1,045,130 | |
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Weighted average fair value at grant date | | $ | 21.4 | | | $ | 27.74 | | | $ | 21.3 | | | $ | 21.97 | |
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Assumptions: | | | | | | | | |
Expected term (in years) | | 4.69 | | | 5.75 | | | 4.74 | | | 5.88 | |
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Expected volatility | | 17.52 | % | | 26.27 | % | | 17.6 | % | | 27.05 | % |
Expected dividend yield | | — | % | | — | % | | — | % | | — | % |
Risk free interest rate | | 1.53 | % | | 1.02 | % | | 1.49 | % | | 1 | % |
Restricted Stock Units: |
Restricted stock units ("RSUs") vest at the end of three or five years. Our 2008, 2011 and 2014 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 six months ended June 30, 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 | | 16,334 | | | 115.67 | | | | | | | | |
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Vested and released | | (17,288 | ) | | 85 | | | | | | | | |
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Forfeited | | (5,610 | ) | | 89.21 | | | | | | | | |
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Non-vested at June 30, 2014 | | 63,893 | | | $ | 96.13 | | | $ | 7,566 | | | | | | |
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As of June 30, 2014, there was $4.8 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 3.38 years. |