Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

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 share-based payments recognized for the three month periods ended March 31 (in thousands):

	Three Months Ended March 31,
	2017		2016
Stock options	$	12,089	$	9,244
Restricted stock	11,004		5,942
Stock-based compensation	$	23,093	$	15,186

The tax benefits recorded on stock based compensation were $15.0 million and $6.2 million for the three month periods ended March 31, 2017 and 2016, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of March 31, 2017 (cost in thousands):

	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition (in Years)
Stock options	$	101,535	1.60
Restricted stock	26,310		0.76
Total	$	127,845

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 three month period ended March 31, 2017 (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, 2016	6,146		$	91.20	3,429	$	55.00			$	309,238
Granted	1,598		150.85					$	37.58
Exercised	(236	)	64.65							20,443
Forfeited	(17	)	142.33
Outstanding at March 31, 2017	7,491		$	104.65	3,833	$	65.23			$	350,477
Expected to vest as of March 31, 2017	7,491		$	104.65

The aggregate intrinsic value of stock options exercisable at March 31, 2017 was $330.4 million. The weighted average remaining contractual term of options exercisable at March 31, 2017 was 5.4 years.

The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model during the three months ended March 31, 2017 and 2016, with the following weighted-average assumptions for grants or modifications during the period:

	March 31
	2017		2016
Risk-free interest rate	1.83	%	1.11	%
Dividend yield	—		—
Expected volatility	27.31	%	27.36	%
Expected life (in years)	4.2		3.3

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 three months ended March 31, 2017 (shares in thousands):

	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016	379		$	140.39
Granted	129		153.94
Vested	(203	)	136.77
Cancelled	(31	)	152.71
Outstanding at March 31, 2017	274		$	158.06