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Common Stock | 12 Months Ended
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Dec. 31, 2013
Common Stock | 5) COMMON STOCK Dividends Cash dividends of $.20 per share ($19.6 million in the aggregate) were declared and paid during 2013, $.60 per share ($58.4 million in the aggregate), including a $.40 per share special cash dividend ($38.9 million) were declared and paid during 2012 and $.20 per share ($19.5 million in the aggregate) were declared and paid during 2011. All classes of our common stock have similar economic rights. Stock Repurchase Programs In various prior years, our Board of Directors has approved stock repurchase programs authorizing us to purchase shares of our outstanding Class B Common Stock on the open market at prevailing market prices or in negotiated transactions off the market. There is no expiration date for our stock repurchase programs. The most recent approval occurred during 2007 at which time our Board of Directors authorized the purchase of up to 10 million shares, a portion of which (as reflected below) remains available for purchase as of December 31, 2013. The following schedule provides information related to our stock repurchase programs for each of the three years ended December 31, 2013. All of the shares repurchased during 2013 and 2012 related to income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants. No shares were repurchased during 2013 or 2012 pursuant to our publicly announced stock repurchase program.
|  | Total number of shares purchased as part of publicly announced programs |  |  | Total price paid for shares purchased as part of publicly announced programs (in thousands) |  |  | Total number of shares purchased related to stock-based compensation plans (a.) |  |  | Total price paid for shares purchased related to stock-based compensation plans (in thousands) |  |  | Aggregate number of shares purchased |  |  | Aggregate price paid for shares purchased (in thousands) |  |  | Maximum number of shares that may yet be purchased under the publicly announced program |
Balance as of January 1, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,152,339 |
2011 |  |  | 1,384,637 |  |  | $ | 50,576 |  |  |  | 217,649 |  |  | $ | 9,906 |  |  |  | 1,602,286 |  |  | $ | 60,482 |  |  |  | 767,702 |
2012 |  |  | — |  |  |  | — |  |  |  | 433,312 |  |  | $ | 19,154 |  |  |  | 433,312 |  |  | $ | 19,154 |  |  |  | 767,702 |
2013 |  |  | — |  |  |  | — |  |  |  | 427,170 |  |  | $ | 27,201 |  |  |  | 427,170 |  |  | $ | 27,201 |  |  |  | 767,702 |
Total for three year period ended December 31, 2013 |  |  | 1,384,637 |  |  | $ | 50,576 |  |  |  | 1,078,131 |  |  | $ | 56,261 |  |  |  | 2,462,768 |  |  | $ | 106,837 |  |  |  |  |
(a.) | During 2013, there were 427,170 shares repurchased at an average price of $63.68 per share related to income tax withholding obligations in connection with stock-based compensation programs. During 2012, there were 432,562 shares repurchased at an average price of $44.28 per share related to income tax withholding obligations in connection with stock-based compensation programs, and 750 shares repurchased at an average of $.01 per share related to restricted shares that were forfeited by former employees pursuant to the terms of our restricted stock purchase plan. During 2011, there were 217,649 shares repurchased at an average price of $45.51 per share related to income tax withholding obligations in connection with stock-based compensation programs.
Stock-based Compensation Plans At December 31, 2013, we have a number of stock-based employee compensation plans. Pursuant to the FASB’s guidance, we expense the grant-date fair value of stock options and other equity-based compensation pursuant to the straight-line method over the stated vesting period of the award using the Black-Scholes option-pricing model. The expense associated with share-based compensation arrangements is a non-cash charge. In the Consolidated Statements of Cash Flows, share-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities and aggregated to $27.8 million in 2013, $22.5 million in 2012 and $18.2 million in 2011. In accordance with ASC 718, excess income tax benefits related to stock based compensation are classified as cash inflows from financing activities on the Consolidated Statement of Cash Flows. Previously for the years ended December 31, 2012 and 2011, we included $16.0 million and $7.6 million, respectively, of excess income tax benefits related to stock based compensation as net cash provided by operating activities as included in the change in accrued and deferred income taxes for each year. In our Consolidated Statements of Cash Flows, as included herein, those amounts are reflected as cash inflows from financing activities for each respective year. We assessed this misclassification and concluded that it was not material to our previously issued annual and quarterly Consolidated Statements of Cash Flows. During 2013, we generated $20.1 million of excess income tax benefits related to stock based compensation which are reflected as cash inflows from financing activities in our Consolidated Statements of Cash Flows. Compensation costs related to outstanding stock options were recognized as follows: (i) a pre-tax charge of $25.8 million ($16.1 million after-tax) during 2013; (ii) a pre-tax charge of $20.1 million ($12.5 million after-tax) during 2012, and; (iii) a pre-tax charge of $15.8 million ($9.8 million after-tax) during 2011. In addition, during the years ended 2013, 2012 and 2011, compensation costs of $1.4 million ($853,000 after-tax), $2.3 million ($1.4 million after-tax) and $2.0 million ($1.2 million after-tax), respectively, were recognized related to restricted stock. We adopted the 2005 Stock Incentive Plan, as amended in 2008 and 2010, (the “Stock Incentive Plan”) which replaced our Amended and Restated 1992 Stock Option Plan which expired in July of 2005. An aggregate of twenty-three million shares of Class B Common Stock has been reserved under the Stock Incentive Plan. There were 2,737,725; 2,621,161 and 2,473,500 stock options, net of cancellations, granted during 2013, 2012 and 2011, respectively. The per option weighted-average grant-date fair value of options granted during 2013, 2012 and 2011, was $13.33, $10.73 and $11.62, respectively. Stock options to purchase Class B Common Stock have been granted to our officers, key employees and directors under our above referenced stock option plans. All stock options were granted with an exercise price equal to the fair market value on the date of the grant. Options are exercisable ratably over a four-year period beginning one year after the date of the grant. All outstanding options expire five years after the date of the grant. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were derived from averaging the number of options granted during the most recent five-year period. The weighted-average assumptions reflected below were each based upon eighteen option grants.
Year Ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
Volatility |  |  | 36 | % |  |  | 33 | % |  |  | 29 | %
Interest rate |  |  | 1 | % |  |  | 1 | % |  |  | 2 | %
Expected life (years) |  |  | 3.6 |  |  |  | 3.5 |  |  |  | 3.5 |
Forfeiture rate |  |  | 11 | % |  |  | 10 | % |  |  | 9 | %
Dividend yield |  |  | 0.5 | % |  |  | 0.6 | % |  |  | 0.7 | %
The risk-free rate is based on the U.S. Treasury zero coupon four year yield in effect at the time of grant. The expected life of the stock options granted was estimated using the historical behavior of employees. Expected volatility was based on historical volatility for a period equal to the stock option’s expected life. Expected dividend yield is based on our dividend yield at the time of grant. The table below summarizes our stock option activity during each of the last three years:
Outstanding Options |  | Number of Shares |  |  | Average Option Price |  |  | Range (High-Low) |
Balance, January 1, 2011 |  |  | 6,594,950 |  |  | $ | 25.16 |  |  | $ | 32.28 -$16.22 |
Granted |  |  | 2,894,500 |  |  | $ | 43.66 |  |  | $ | 54.79 -$38.12 |
Exercised |  |  | (1,563,255 | ) |  | $ | 26.38 |  |  | $ | 32.28 -$16.22 |
Cancelled |  |  | (367,250 | ) |  | $ | 32.60 |  |  | $ | 46.97 -$16.22 |
Balance, January 1, 2012 |  |  | 7,558,945 |  |  | $ | 31.63 |  |  | $ | 54.79 -$16.22 |
Granted |  |  | 2,966,850 |  |  | $ | 37.01 |  |  | $ | 44.83 -$36.95 |
Exercised |  |  | (2,608,007 | ) |  | $ | 23.22 |  |  | $ | 46.97 -$16.22 |
Cancelled |  |  | (481,550 | ) |  | $ | 38.00 |  |  | $ | 46.97 -$16.22 |
Balance, January 1, 2013 |  |  | 7,436,238 |  |  | $ | 36.31 |  |  | $ | 54.79 -$16.22 |
Granted |  |  | 2,889,750 |  |  | $ | 53.51 |  |  | $ | 79.79 -$53.38 |
Exercised |  |  | (2,288,666 | ) |  | $ | 32.27 |  |  | $ | 54.79 -$16.22 |
Cancelled |  |  | (416,364 | ) |  | $ | 43.93 |  |  | $ | 53.38 -$16.22 |
Balance, December 31, 2013 |  |  | 7,620,958 |  |  | $ | 43.63 |  |  | $ | 79.79 -$30.32 |
Outstanding options vested and exercisable as of December 31, 2013 |  |  | 1,756,128 |  |  | $ | 35.60 |  |  | $ | 46.97 -$30.32 |
The following table provides information about unvested options for the year December 31, 2013:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested options as of January 1, 2013 |  |  | 5,250,926 |  |  | $ | 10.74 |
Granted |  |  | 2,889,750 |  |  | $ | 13.33 |
Vested |  |  | (1,864,982 | ) |  | $ | 10.22 |
Cancelled |  |  | (410,864 | ) |  | $ | 11.66 |
Unvested options as of December 31, 2013 |  |  | 5,864,830 |  |  | $ | 12.12 |
The following table provides information about all outstanding options, and exercisable options, at December 31, 2013:
|  | Options Outstanding |  |  | Options Exercisable |
Number |  |  | 7,620,958 |  |  |  | 1,756,128 |
Weighted average exercise price |  | $ | 43.64 |  |  | $ | 35.60 |
Aggregate intrinsic value as of December 31, 2013 |  | $ | 286,740,433 |  |  | $ | 80,189,277 |
Weighted average remaining contractual life |  |  | 2.9 |  |  |  | 1.6 |
The total in-the-money value of all stock options exercised during the years ended December 31, 2013, 2012 and 2011 were $70.9 million, $54.4 million and $28.9 million, respectively. The weighted average remaining contractual life for options outstanding and weighted average exercise price per share for exercisable options at December 31, 2013 were as follows:
|  | Options Outstanding |  |  | Exercisable Options |  |  | Expected to Vest Options (a) |  |  |  |  |  |  |  |  |  |  |  |  |
Exercise Price |  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Life (in Years) |  |  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Shares |  |  | Weighted Average Exercise Price Per Share |
$30.32 – $36.95 |  |  | 3,183,583 |  |  | $ | 35.14 |  |  |  | 2.4 |  |  |  | 1,259,453 |  |  | $ | 32.45 |  |  |  | 1,716,901 |  |  | $ | 36.91 |
$38.12 – $43.67 |  |  | 1,685,350 |  |  |  | 43.56 |  |  |  | 2.1 |  |  |  | 496,175 |  |  |  | 43.58 |  |  |  | 1,061,101 |  |  |  | 43.55 |
$44.83 – $53.38 |  |  | 2,724,525 |  |  |  | 53.36 |  |  |  | 4.0 |  |  |  | 500 |  |  |  | 46.97 |  |  |  | 2,430,648 |  |  |  | 53.36 |
$54.79 – $79.79 |  |  | 27,500 |  |  |  | 67.64 |  |  |  | 4.0 |  |  |  | 0 |  |  |  | N/A |  |  |  | 24,538 |  |  |  | 67.64 |
Total |  |  | 7,620,958 |  |  | $ | 43.63 |  |  |  | 2.9 |  |  |  | 1,756,128 |  |  | $ | 35.60 |  |  |  | 5,233,188 |  |  | $ | 46.04 |
(a) | Assumes a weighted average forfeiture rate of 10.8%.
In addition to the Stock Incentive Plan, we have the following stock incentive and purchase plans: (i) the 2010 Employees’ Restricted Stock Purchase Plan (“2010 Plan”), which replaced the Second Amended and Restated 2001 Employees’ Restricted Stock Purchase Plan (“2001 Plan”), which allows eligible participants to purchase shares of Class B Common Stock at par value, subject to certain restrictions, and; (ii) a 2005 Employee Stock Purchase Plan which allows eligible employees to purchase shares of Class B Common Stock at a ten percent discount. There were 90,587, 117,901 and 98,366 shares issued pursuant to the Employee Stock Purchase Plan during 2013, 2012 and 2011, respectively. Compensation expense recorded in connection with this plan was $581,000, $533,000 and $461,000 during 2013, 2012 and 2011, respectively. We have reserved 6.0 million shares of Class B Common Stock for issuance under these various plans (excluding terminated plans) and have issued approximately 1.0 million shares, net of cancellations, pursuant to the terms of these plans (excluding terminated plans) as of December 31, 2013. During 2013, pursuant to the 2010 Plan, the Compensation Committee (“Committee”) approved the issuance of 10,000 restricted shares of our Class B Common Stock at a weighted average price of $80.36 per share ($803,600 in the aggregate) to various employees. These shares are scheduled to vest ratably on the first, second, third and fourth anniversaries of the grant date. We recorded compensation expense of approximately $41,000 during 2013 in connection with this grant. The remaining expense associated with these awards (estimated at approximately $760,000 as of December 31, 2013) will be recorded over the remaining vesting periods of the awards, assuming the recipients remain employed by us. During 2012, pursuant to the 2010 Plan, the Committee approved the issuance of 54,127 restricted shares of our Class B Common Stock at a weighted average price of $36.95 per share ($2.0 million in the aggregate) to our CEO and Chairman of the Board. These shares are scheduled to vest as follows: 50% on the first anniversary date of the grant, and 25% on each of the second and third anniversary dates of the grant, assuming our CEO remains employed by us. In the event that our CEO’s employment is terminated for reasons other than death, disability or retirement, any unvested shares will be forfeited, unless otherwise specified in a separation agreement between us and our CEO. 27,063 of these shares became fully vested during 2013. In connection with this grant, we recorded compensation expense of approximately $523,000 during 2013 and approximately $1 million during 2012. The remaining expense associated with these awards (estimated at approximately $500,000 as of December 31, 2013) will be recorded over the remaining vesting periods of the awards, assuming the recipient remain employed by us. During 2011, pursuant to the 2010 Plan, the Committee approved the issuance of 21,500 restricted shares of our Class B Common Stock at a weighted average price of $53.21 per share ($1.1 million in the aggregate) to various employees, of which 10,000 of these shares became fully vested during 2013. During 2012, 750 of these shares became fully vested and 750 of these shares were cancelled. The remaining 10,000 shares are scheduled to vest on the third anniversary of the grant date. We recorded compensation expense of $354,000 during 2013, $370,000 during 2012 and $198,000 during 2011 in connection with these grants. The remaining expense associated with these awards (estimated at $183,000 as of December 31, 2013) will be recorded over the remaining vesting period of the awards, assuming the recipients remain employed by us. The 2001 Plan, as described above, expired in March, 2010. Under this plan, we had 2.4 million shares of Class B Common Stock reserved for issuance and have issued approximately 1.2 million shares, net of cancellations, pursuant to the terms of this plan as of December 31, 2010, of which 39,831 became fully vesting during 2013, 62,044 became fully vested during 2012 and 78,133 became fully vested during 2011. During the first quarter of 2010, pursuant to the 2001 Plan and prior to its expiration, the Committee approved the issuance of 49,472 restricted shares of our Class B Common Stock at $30.32 per share ($1.5 million in the aggregate) to our CEO and Chairman of the Board. These shares, which were issued pursuant to a provision in our CEO’s employment agreement, are scheduled to vest ratably on the first, second, third and fourth anniversary dates of the grant, assuming our CEO remains employed by us. In the event that our CEO’s employment is terminated by reason of disability, death, without proper cause or due to breach of the CEO’s employment agreement by us, the vesting of these awards will occur immediately. 12,368 of these shares became fully vested in each of 2013, 2012 and 2011. In connection with this grant, we recorded compensation expense of $375,000 in each of 2013, 2012 and 2011 and $355,000 during 2010, and the remaining expense associated with this award (estimated at $20,000 as of December 31, 2013) will be recorded over the remaining vesting period of the award. During the first quarter of 2009, pursuant to the 2001 Plan, the Committee approved the issuance of 109,850 restricted shares of our Class B Common Stock at $20.26 per share ($2.2 million in the aggregate) to our CEO. These shares are scheduled to vest ratably on the first, second, third and fourth anniversary dates of the grant and are subject to the same conditions and terms as mentioned above in connection with the grant of restricted shares during the first quarter of 2010. 27,463 of these shares became fully vested in 2013, 27,462 of these shares became fully vested in each of 2012 and 2011 and 27,463 of these shares became fully vested in 2010. In connection with this grant, we recorded compensation expense of approximately $74,000 during 2013, $556,000 during each of 2012, 2011 and 2010 and $482,000 during 2009. This award was fully vested at December 31, 2013. During the first quarter of 2008, pursuant to the 2001 Plan, the Committee approved the issuance of 62,190 restricted shares of our Class B Common Stock at $24.12 per share ($1.5 million in the aggregate) to our CEO. These shares were scheduled to vest ratably on the first, second, third and fourth anniversary dates of the grant and were subject to the same conditions and terms as mentioned above in connection with the grant of restricted shares during the first quarter of 2010. 15,548 and 15,546 of these shares became fully vesting during 2012 and 2011, respectively, and 15,548 of these shares became fully vested in each of 2010 and 2009. In connection with this grant, we recorded compensation expense of $15,000 during 2012 and $375,000 during 2011. This award was fully vested at December 31, 2012. During the fourth quarter of 2007, pursuant to the 2001 Plan, the Committee approved the issuance of 61,362 restricted shares of our Class B Common Stock at $24.45 per share ($1.5 million in the aggregate) to our CEO. These shares were scheduled to vest ratably on the first, second, third and fourth anniversary dates of the grant and were subject to the same conditions and terms as mentioned above in connection with the grant of restricted shares during the first quarter of 2010. 15,341 of these shares became fully vested in each of 2011 and 2010 and 15,340 of these shares became fully vested in each of 2009 and 2008. In connection with this grant, we recorded compensation expense of $333,000 during 2011 and $375,000 during 2010. This award was fully vested at December 31, 2011. Additionally, during 2007, pursuant to the 2001 Plan, the Committee approved the issuance of 22,250 restricted shares of our Class B Common stock at a weighted average of $29.62 per share ($659,000 in the aggregate) to various employees. These shares had various vesting schedules. We recorded compensation expense of $42,000 during 2012 and $120,000 during 2011, in connection with these grants. These awards were fully vested at December 31, 2012. At December 31, 2013, 25,657,523 shares of Class B Common Stock were reserved for issuance upon conversion of shares of Class A, C and D Common Stock outstanding, for issuance upon exercise of options to purchase Class B Common Stock and for issuance of stock under other incentive plans. Class A, C and D Common Stock are convertible on a share for share basis into Class B Common Stock. In connection with the long-term incentive plans described above, we recorded compensation expense of $2.0 million in 2013, $2.8 million in 2012 and $2.4 million in 2011. Including the compensation expense recognized related to outstanding stock options of $25.8 million in 2013, $20.1 million in 2012 and $15.8 million in 2011, we recorded a total stock compensation expense of $27.8 million in 2013, $22.5 million in 2012 and $18.2 million in 2011.

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