Equity Plans and Share-based Compensation

12 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Equity Plans and Share-based Compensation

Equity Plans and Share-based Compensation

Our Equity Plan provides for grants of stock options, restricted stock, stock bonuses, stock appreciation rights and restricted stock units (“RSUs”). As of September 30, 2012, we had 1.2 million shares of common stock reserved for future grants under our Equity Plan. Based on our Equity Plan design, the 1.2 million shares of common stock equates to approximately 0.8 million RSUs reserved for future grants which we generally use as long-term employee incentive and retention tools.

Under the Equity Plan, we granted selected executives and certain key employees performance-based RSUs, whose vesting is contingent upon meeting certain Company-wide performance goals. We estimate the probable number of performance-based RSUs that will be vested until the achievement of the performance goals is known.

The following table presents our share-based compensation resulting from equity awards that we recorded in our consolidated statements of operations:

	Year Ended September 30,
	2012		2011		2010
Cost of operations	$	7,489	$	3,440	$	2,442
Sales and marketing	27,744		19,273		9,772
Systems development and programming	6,126		5,747		2,597
General and administrative	15,834		7,514		4,796
Total share-based compensation	$	57,193	$	35,974	$	19,607

During the year of 2012, 2011, and 2010, we capitalized $3.4 million, $1.9 million, and $1.1 million, respectively, of share-based compensation expense related to internal use software development. Net cash proceeds from the exercise of stock options for 2012, 2011, and 2010, were $2.8 million, $2.0 million, and $8.4 million.

We have calculated an additional paid in capital (“APIC”) pool that represents the excess tax benefits related to share-based compensation that are available to absorb future tax deficiencies. We include those excess tax benefits in APIC only when they have been realized. If the amount of future tax deficiencies is greater than the available APIC pool, we will record the excess deficiencies as income tax expense in our consolidated statements of operations. Excess tax benefits or tax deficiencies, to the extent realized, are a factor in the calculation of diluted shares used in computing dilutive income (loss) per share. During 2012, 2011, and 2010, we realized an excess tax benefit in APIC from the exercise of stock options and the vesting of RSUs, which we present as financing cash flows with a corresponding reduction in operating cash flows in the consolidated statements of cash flows.

The following table presents our stock option activity for 2012:

	Shares		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Term (in years)	Aggregate Intrinsic value
Outstanding as of September 30, 2011	986		$	10.50
Exercised	(359	)	7.91
Outstanding as of September 30, 2012	627		11.98		2.70	$	38,735
Exercisable as of September 30, 2012	627		$	11.98	2.70	$	38,735

Total intrinsic value of options exercised for 2012, 2011, and 2010, was $18.5 million, $17.6 million, and $66.1 million, respectively.

Information regarding the weighted-average remaining contractual life and weighted-average exercise price of options outstanding and options exercisable as of September 30, 2012, for selected exercise price ranges is as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$ 3.59 - $ 7.99	77	2.12	$	7.58	77	$	7.58
8.25 - 9.81	33	1.30	9.63		33	9.63
10.11 - 10.67	82	2.04	10.57		82	10.57
11.20 - 12.89	342	2.90	12.43		342	12.43
13.37 - 17.55	93	3.52	16.05		93	16.05
$ 3.59 - $ 17.55	627	2.70	$	11.98	627	$	11.98

The following table presents a summary of RSUs award activity:

	Shares		Weighted Avg. Share Value
Balance as of September 30, 2011	2,535		$	41.90
Granted	1,419		55.56
Vested and released	(876	)	38.52
Cancelled	(124	)	45.76
Balance as of September 30, 2012	2,954		$	49.32

We granted 0.9 million, 0.8 million, and 0.1 million shares of performance-based RSUs during the years 2012, 2011, and 2010, respectively. The performance criteria have been fully achieved in 2012, 2011, and 2010.

Total fair value of RSUs vested during 2012, 2011, and 2010 was $48.4 million, $37.9 million, and $18.5 million, respectively. As of September 30, 2012, we had $78.3 million of total unrecognized share-based compensation costs net of estimated forfeitures that is expected to be recognized over a weighted average period of 1.5 years.