Stock-based compensation

3 Months Ended

Mar. 31, 2013

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

Disclosure of Compensation Related Costs, Share-based Payments

Stock-based compensation

The Company accounts for its stock-based compensation in accordance with ASC Topic 718. Stock-based compensation expense totaled $3.8 million and $5.4 million for the three months ended March 31, 2013 and 2012, respectively. During the three months ended March 31, 2013 and 2012, no associated future income tax benefit was recognized. As of March 31, 2013, there was approximately $26.4 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements granted under the Company’s stock incentive plans. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.5 years.

The fair value of each time-vested option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model, while the fair value of market performance-based stock options is calculated using a Monte Carlo simulation model. Expected volatility is based on historical volatility trends as well as implied future volatility observations as determined by independent third parties. In determining the expected life of the option grants, the Company uses historical data to estimate option exercise and employee termination behavior. The expected life represents an estimate of the time options will remain outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. treasury yield in effect at the time of grant.

The following table sets forth fair value per share information, including related assumptions, used to determine compensation cost for the Company’s non-qualified stock options consistent with the requirements of ASC Topic 718.

	Three Months Ended
	March 31,
	2013			2012
Weighted-average fair value per share of options granted during the period	$	6.67		$	6.36
Weighted-average assumptions:
Expected stock price volatility	34.2		%	48.0		%
Risk-free interest rate	0.8		%	1.0		%
Expected option life (years)	5.0			4.8
Expected annual dividend yield	1.9		%	2.5		%

Stock option activity during the three months ended March 31, 2013 was as follows:

	Options (In Thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2012	6,958		$	19.94
Granted	12		26.26
Exercised	(133	)	15.05
Forfeited or expired	(18	)	17.65
Outstanding at March 31, 2013	6,819		$	20.05	6.6	$	47,195
Exercisable at March 31, 2013	3,137		$	22.79	4.1	$	15,729

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been realized by the option holders had all option holders exercised their options on March 31, 2013. The total intrinsic value of options exercised during the three months ended March 31, 2013 and 2012 was $1.5 million and $1.1 million, respectively. The intrinsic value of a stock option is the excess of the Company’s closing stock price on that date over the exercise price, multiplied by the number of shares subject to the option.

The following table summarizes the Company’s unvested stock option activity for the three months ended March 31, 2013:

	Shares		Weighted- Average Exercise Price (per Share)
	(Amounts in thousands)
Unvested at December 31, 2012	3,690		$	17.69
Granted	12		26.26
Vested	(6	)	17.95
Forfeited	(18	)	17.65
Unvested at March 31, 2013	3,678		$	17.72

The following table summarizes the Company’s unvested restricted stock unit activity for the three months ended March 31, 2013:

	Units		Weighted- Average Grant Date Fair Value (per Unit)
	(Amounts in thousands)
Unvested at December 31, 2012	1,446		$	18.61
Granted	4		26.26
Vested	(7	)	18.02
Forfeited	(9	)	18.50
Unvested at March 31, 2013	1,434		$	18.64