Equity Compensation

6 Months Ended

Jun. 30, 2012

Equity Compensation

4. Equity Compensation

The stock-based compensation expense and related income tax benefit recognized in our Condensed Consolidated Statements of Income in the periods indicated were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Stock-based compensation expense	$	4,272		$	4,758		$	8,755		$	8,672
Income tax (benefit)	($	1,645	)	($	1,832	)	($	3,371	)	($	3,339	)

We did not capitalize any stock-based compensation cost in the three or six months ended June 30, 2012 or 2011.

As of June 30, 2012, we estimated that pre-tax compensation expense for unvested stock-based compensation grants in the amount of approximately $30,300, net of estimated forfeitures, will be recognized in future periods. This expense will be recognized over the remaining service period applicable to the grantees which, on a weighted-average basis, is approximately 2.3 years.

The stock options granted, forfeited, exercised and expired in the period indicated were as follows:

	Six Months Ended June 30, 2012
	# of Shares			Weighted Average Exercise Price		Aggregate Exercise Price			Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (1)
Outstanding at beginning of period		1,765,881		$	79.24	$	139,922
Granted		156,500		$	75.16		11,763
Forfeited		(6,667	)	$	90.45		(603	)
Exercised		(197,965	)	$	40.87		(8,091	)
Expired		(1,734	)	$	17.25		(30	)
Outstanding at end of period		1,716,015		$	83.31	$	142,961			3.5	$	5,875
Exercisable at end of period		1,358,175		$	83.12	$	112,887			2.9	$	5,875

(1) The aggregate intrinsic value of the stock options was calculated by identifying those stock options that had a lower exercise price than the closing market price of our common stock on June 29, 2012 and multiplying the difference between the closing market price of our common stock and the exercise price of each of those stock options by the number of shares subject to those stock options that were outstanding or exercisable, as applicable.

The following table sets forth information regarding the stock options granted and exercised in the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Shares subject to stock options granted		0		0		156,500		159,500
Weighted average grant date fair value per share	$	0	$	0	$	31.36	$	28.90
Shares subject to stock options exercised		93,911		42,780		197,965		103,310
Intrinsic value of stock options exercised	$	2,299	$	1,659	$	4,788	$	2,570
Proceeds received from stock options exercised	$	3,423	$	1,955	$	8,091	$	4,983
Tax benefits realized from stock options exercised	$	733	$	638	$	1,597	$	989

The intrinsic value of a stock option is the difference between the fair market value of the stock and the option exercise price.

The fair value of each stock option grant was estimated on the date of grant using the following assumptions:

	Three Months Ended June 30,			Six Months Ended June 30,
	2012		2011	2012			2011
Risk-free interest rates		Not applicable	Not applicable		0.7	%		1.8	%
Expected lives (in years)		Not applicable	Not applicable		4.5			4.7
Volatility		Not applicable	Not applicable		51	%		48	%
Dividend yield		Not applicable	Not applicable		None			None

The following table sets forth the number of restricted stock units (“RSUs”) that were granted, forfeited and vested in the period indicated:

	Six Months Ended June 30, 2012
	# of RSUs			Weighted Average Grant Date Fair Value
Unvested at beginning of period		314,006		$	79.44
Granted		272,578		$	74.20
Forfeited		(30,397	)	$	75.05
Vested		(117,038	)	$	82.59
Unvested at end of period		439,149		$	75.65

In the six months ended June 30, 2012:

• 48,935 RSUs vested and were settled in cash for $3,073; and

• 68,103 RSUs vested and were settled in shares of our common stock having a fair market value of $4,536.