Share-Based Compensation

6 Months Ended

Jun. 30, 2015

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

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Share–Based Compensation

We measure all share-based payments to employees, including grants of stock options, and use a fair-value-based method for the recording of related compensation expense in our consolidated statements of income. In determining the expense we record for stock options granted to directors and employees of our subsidiaries and affiliates, we estimate the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The significant assumptions we utilize in applying the Black-Scholes option pricing model are the risk-free interest rate, the expected term, the dividend yield and the expected volatility.

We charged compensation expense related to our stock compensation plans against income before income taxes of $637,887 and $497,614 for the three months ended June 30, 2015 and 2014, respectively, with a corresponding income tax benefit of $223,260 and $174,165, respectively. We charged compensation expense related to our stock compensation plans against income before income taxes of $1.3 million and $1.0 million for the six months ended June 30, 2015 and 2014, respectively, with a corresponding income tax benefit of $462,126 and $363,484, respectively. At June 30, 2015, we had $3.3 million of unrecognized compensation expense related to nonvested share-based compensation granted under our stock compensation plans. We expect to recognize this compensation expense over a weighted average period of 1.3 years.

We received cash from option exercises under all stock compensation plans for the three months ended June 30, 2015 and 2014 of $12.2 million and $1.2 million, respectively. We received cash from option exercises under all stock compensation plans for the six months ended June 30, 2015 and 2014 of $13.5 million and $1.4 million, respectively. We realized actual tax benefits for the tax deductions from option exercises of share-based compensation of $348,485 and $52,159 for the three months ended June 30, 2015 and 2014, respectively. We realized actual tax benefits for the tax deductions from option exercises of share-based compensation of $419,735 and $63,674 for the six months ended June 30, 2015 and 2014, respectively.