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:

• the 2011 Incentive Stock Plan, which our stockholders approved in May 2011;

• the 2008 Incentive Stock Plan, which our stockholders approved in May 2008;

• the 2005 Incentive Stock Plan, which our stockholders approved in April 2005;

• the 2000 Nonstatutory Stock Option Plan, which expired in February 2010;

• the 1997 Stock Option Plan, which expired in January 2007;

• the 1996 Directors Stock Option Plan, which expired in May 2006; and

• 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:

In thousands
	Three Months Ended March 31,
	2014		2013
Cost of revenues – stock option plan	$	7	$	40
Selling, general and administrative – stock option plan	4,041		3,530
Selling, general and administrative – RSUs	315		195
Selling, general and administrative – ESPP	309		282
Total pre-tax expense	$	4,672	$	4,047

The following table sets forth the tax benefits related to stock compensation:

In thousands
	Three Months Ended March 31,
	2014		2013
Tax benefit recognized in Statement of Income	$	909	$	1,130
Excess tax benefit realized	3,734		4,203

Stock Options:

Stock option activity for the three months ended March 31, 2014, is summarized as follows:

	Number of Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Total Aggregate Intrinsic Value
					(in years)	(in thousands)
Outstanding at beginning of year	5,540,482		$	70.29
Granted	854,778		115.70
Exercised	(182,867	)	51.61
Forfeited	(28,088	)	84.58
Canceled or expired	(1,049	)	65.11
Outstanding at March 31, 2014	6,183,256		$	77.06	6.59	$	227,883
Exercisable at March 31, 2014	3,417,439		$	62.02	5.54	$	176,414
Vested and expected to vest at March 31, 2014	5,884,031		$	75.89

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).

In thousands
	Three Months Ended March 31,
	2014		2013
Total intrinsic value of options exercised	$	11,796	$	14,562

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:

	Three Months Ended March 31,
	2014			2013
Stock options granted (shares)	854,778			977,090
Weighted average fair value at grant date	$	21.28		$	21.57
Assumptions:
Expected term (in years)	4.78			6.00
Expected volatility	17.68		%	27.10		%
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:

	Number of Units		Weighted Average Grant Date Fair Value		Total Aggregate Intrinsic Value
					(in thousands)
Non-vested at beginning of year	70,457		$	88.32
Granted	16,084		115.69
Vested and released	(17,288	)	85.00
Forfeited	(5,383	)	88.10
Non-vested at March 31, 2014	63,870		$	96.13	$	7,257

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.