STOCK COMPENSATION PLANS

9 Months Ended

Oct. 02, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation Plans

STOCK COMPENSATION PLANS

We have various stock-based compensation programs under which awards, including stock options, performance stock units (“PSUs”) and performance stock, stock appreciation rights, restricted stock units (“RSUs”) and restricted stock may be granted to employees, non-employee directors and certain service providers upon whom the successful conduct of our business is dependent. These programs and the accounting treatment related thereto are described in Note 10 to the Consolidated Financial Statements included in our 2015 Annual Report on Form 10-K.

For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows:

	Three Months Ended				Nine Months Ended
	October 2, 2016		October 4, 2015		October 2, 2016		October 4, 2015
Pre-tax compensation expense	$	14,491	$	13,374	$	40,699	$	39,989
Related income tax benefit	4,406		4,334		13,186		13,676

Compensation costs for stock compensation plans are primarily included in selling, marketing and administrative expense. As of October 2, 2016, total stock-based compensation cost related to non-vested awards not yet recognized was $74,083 and the weighted-average period over which this amount is expected to be recognized was approximately 2.2 years.

Stock Options

A summary of activity relating to grants of stock options for the period ended October 2, 2016 is as follows:

Stock Options	Shares		Weighted-Average Exercise Price (per share)	Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at beginning of the period	6,842,563		$75.48	5.8 years
Granted	1,354,390		$90.72
Exercised	(1,649,402	)	$58.19
Forfeited	(189,933	)	$100.65
Outstanding as of October 2, 2016	6,357,618		$82.46	6.5 years	$	113,418
Options exercisable as of October 2, 2016	3,597,028		$71.87	4.9 years	$	100,042

The weighted-average fair value of options granted was $11.46 and $19.18 per share for the periods ended October 2, 2016 and October 4, 2015, respectively. The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions:

	Nine Months Ended
	October 2, 2016		October 4, 2015
Dividend yields	2.4	%	2.0	%
Expected volatility	16.8	%	20.2	%
Risk-free interest rates	1.5	%	1.9	%
Expected lives in years	6.8		6.6

The total intrinsic value of options exercised was $70,009 and $60,425 for the periods ended October 2, 2016 and October 4, 2015, respectively.

Performance Stock Units and Restricted Stock Units

A summary of activity relating to grants of PSUs and RSUs for the period ended October 2, 2016 is as follows:

Performance Stock Units and Restricted Stock Units	Number of units		Weighted-average grant date fair value for equity awards (per unit)
Outstanding at beginning of year	495,207		$106.40
Granted	531,019		$93.47
Performance assumption change	5,276		$97.32
Vested	(214,577	)	$94.95
Forfeited	(32,512	)	$100.45
Outstanding as of October 2, 2016	784,413		$102.53

The table above excludes PSU awards for 6,410 units as of October 2, 2016 and 20,586 units as of December 31, 2015 for which the measurement date has not yet occurred for accounting purposes.

The following table sets forth information about the fair value of the PSUs and RSUs granted for potential future distribution to employees and non-employee directors. In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant.

	Nine Months Ended
	October 2, 2016			October 4, 2015
Units granted	531,019			315,443
Weighted-average fair value at date of grant	$	93.47		$	107.53
Monte Carlo simulation assumptions:
Estimated values	$	38.02		$	61.22
Dividend yields	2.5		%	2.0		%
Expected volatility	17.0		%	14.9		%

The fair value of shares vested totaled $19,673 and $40,220 for the periods ended October 2, 2016 and October 4, 2015, respectively.

Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 483,286 units as of October 2, 2016. Each unit is equivalent to one share of the Company’s Common Stock.