Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

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

Stock-Based Compensation

Stock-Based Compensation

The Company has Stock Incentive Plans (the "Plans") pursuant to which the Company’s board of directors may grant stock options or restricted stock to employees. The table below summarizes the expense recognized related to stock-based payments recognized for the three and nine month periods ended September 30 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Stock options	$	8,304	$	4,348	$	25,942	$	13,190
Restricted stock	9,101		9,539		24,083		31,197
Stock-based compensation	$	17,405	$	13,887	$	50,025	$	44,387

The tax benefits recorded on stock based compensation were $28.4 million and $13.9 million for the nine month periods ended September 30, 2016 and 2015, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of September 30, 2016 (cost in thousands):

	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition (in Years)
Stock options	$	50,191	1.39
Restricted stock	10,090		0.44
Total	$	60,281

Stock Options

Stock options are granted with an exercise price estimated to be equal to the fair market value of the Company's stock on the date of grant as authorized by the Company’s board of directors. Options granted have vesting provisions ranging from one to six years and vesting of the options is generally based on the passage of time or performance. Stock option grants are subject to forfeiture if employment terminates prior to vesting.

The following summarizes the changes in the number of shares of common stock under option for the nine month period ended September 30, 2016 (shares and aggregate intrinsic value in thousands):

	Shares		Weighted Average Exercise Price		Options Exercisable at End of Period	Weighted Average Exercise Price of Exercisable Options		Weighted Average Fair Value of Options Granted  During the Period		Aggregate Intrinsic Value
Outstanding at December 31, 2015	5,003		$	72.72	2,545	$	26.82			$	351,277
Granted	1,418		122.88					$	26.27
Exercised	(431	)	43.17							56,330
Forfeited	(137	)	140.67
Outstanding at September 30, 2016	5,853		$	85.43	3,240	$	47.84			$	516,756
Expected to vest as of September 30, 2016	5,853		$	85.43

The aggregate intrinsic value of stock options exercisable at September 30, 2016 was $407.9 million. The weighted average remaining contractual term of options exercisable at September 30, 2016 was 5.1 years.

The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model during the nine months ended September 30, 2016 and 2015, with the following weighted-average assumptions for grants or modifications during the period:

	September 30
	2016		2015
Risk-free interest rate	1.09	%	1.27	%
Dividend yield	—		—
Expected volatility	27.37	%	27.71	%
Expected life (in years)	3.4		3.8

Restricted Stock

Awards of restricted stock and restricted stock units are independent of stock option grants and are subject to forfeiture if employment terminates prior to vesting. The vesting of shares granted is generally based on the passage of time or performance, or a combination of these. Shares vesting based on the passage of time have vesting provisions of one year.

The following table summarizes the changes in the number of shares of restricted stock and restricted stock units for the nine months ended September 30, 2016 (shares in thousands):

	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	497		$	149.40
Granted	131		126.31
Vested	(227	)	151.68
Cancelled	(42	)	145.56
Outstanding at September 30, 2016	359		$	142.48