STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

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

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

At June 30, 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 June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Cost of revenues – stock option plan	$	30	$	33	$	70	$	71
Selling, general and administrative – stock option plan	3,174		3,428		6,704		6,908
Selling, general and administrative – RSUs	383		385		578		688
Selling, general and administrative – ESPP	309		286		591		550
Total pre-tax expense	$	3,896	$	4,132	$	7,943	$	8,217

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

In thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Tax benefit recognized in Statement of Income	$	1,254	$	1,489	$	2,384	$	2,608
Excess tax benefit realized	4,170		6,462		8,373		11,523

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Weighted average fair value at grant date	$	27.74		$	22.29		$	21.97		$	20.08
Expected term (in years)	5.75			6.00			5.88			6.00
Expected volatility	26.27		%	28.30		%	27.05		%	27.90		%
Expected dividend yield	—		%	—		%	—		%	—		%
Risk free interest rate	1.02		%	0.82		%	1.00		%	1.06		%

Stock option activity for the six months ended June 30, 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	1,045,130		96.85
Exercised	(511,812	)	48.27
Canceled or expired	(93,604	)	73.57
Outstanding at June 30, 2013	5,983,378		$	68.79	6.94	$	249,210,004
Exercisable at June 30, 2013	3,098,266		$	55.87	5.63	$	169,028,417
Vested and expected to vest in the future at June 30, 2013	5,091,160		$	65.67	6.63	$	227,958,814

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 June 30, and the exercise price associated with the respective option).

In thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Total exercise intrinsic value of options exercised	$	13,166	$	23,442	$	27,729	$	40,024

RSUs activity for the six months ended June 30, 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	17,800
Released	(12,750	)
Forfeited	(700	)
Outstanding at June 30, 2013	72,552		3.16	$	8,011,917
Exercisable at June 30, 2013	—		0.00	$	—