STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

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

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

At March 31, 2013 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

• Employee Stock Purchase Plan (“ESPP”), which our stockholders approved in May 2001.

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,
	2013		2012
Cost of revenues – stock option plan	$	40	$	38
Selling, general and administrative – stock option plan	3,530		3,480
Selling, general and administrative – RSUs	195		303
Selling, general and administrative – ESPP	282		264
Total pre-tax expense	$	4,047	$	4,085

As of March 31, 2013, there was $45.8 million of total unrecognized compensation expense, related to non-vested option awards and RSUs, which is expected to be recognized over a weighted-average period of 2.29 years.

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

In thousands
	Three Months Ended March 31,
	2013		2012
Tax benefit recognized in Statement of Income	$	1,130	$	1,119
Excess tax benefit realized	4,203		5,061

The Black-Scholes option-pricing model is used in determining the fair value of each option grant. The expected term of options granted is based on historical experience. Expected volatility is based upon historical volatility. The expected dividend yield is zero. The risk-free interest rate is based upon the U.S. Treasury yield rates for a comparable period. The assumptions that we used in the Black-Scholes model are as follows:

	Three Months Ended March 31,
	2013			2012
Weighted average fair value at grant date	$	21.57		$	19.90
Expected term (in years)	6.00			6.00
Expected volatility	27.10		%	27.87		%
Expected dividend yield	—		%	—		%
Risk free interest rate	0.99		%	1.08		%

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

	Number of Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
					(in years)
Outstanding at December 31, 2012	5,543,664		$	61.69
Granted	977,090		95.89
Exercised	(296,974	)	48.98
Canceled or expired	(48,286	)	74.18
Outstanding at March 31, 2013	6,175,494		$	67.61	7.08	$	238,175,533
Exercisable at March 31, 2013	3,224,428		$	54.82	5.75	$	165,599,626
Vested and expected to vest in the future at March 31, 2013	5,200,557		$	64.28	6.75	$	217,924,044

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,
	2013		2012
Total exercise intrinsic value of options exercised	$	14,562	$	16,582

RSUs activity for the three months ended March 31, 2013 is summarized below. 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.

	Number of Units		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
			(in years)
Outstanding at December 31, 2012	68,202
Granted	17,300
Released	(12,750	)
Forfeited	(500	)
Outstanding at March 31, 2013	72,252		3.40	$	7,671,717
Exercisable at March 31, 2013	—		0.00	$	—