Stock Compensation

12 Months Ended

Dec. 31, 2012

Stock Compensation

Stock Compensation

Note 10. Stock Compensation

        We recorded $38.5 million, $29.0 million and $14.9 million, respectively, of stock compensation expense for the years ended December 31, 2012, 2011 and 2010. We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:

	Employee Stock Options For the Year Ended									Employee Stock Purchase Plan For the Year Ended
	December 31,									December 31,
	2012			2011			2010			2012			2011			2010
Average risk-free interest rates		0.49	%		0.97	%		1.10	%		0.28	%		0.53	%		0.66	%
Average expected life (in years)		3.90			3.30			2.97			0.50			0.50			0.50
Volatility		57	%		71	%		74	%		50	%		36	%		46	%
Weighted-average fair value (in dollars)		7.73			7.33			5.23			3.68			1.28			0.64

        The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends.

        Based on our historical experience, we have assumed an annualized forfeiture rate of 5% for our options. Under the true-up provisions of SFAS 123R, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated.

        Total compensation cost of options granted but not yet vested, as of December 31, 2012, was $20.1 million, which is expected to be recognized over the weighted average period of 3.43 years.