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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2012
Share-Based Compensation. |
Share-Based Compensation | 24. Share-Based Compensation Share-Based Incentive Plans The Company has established various Stock Option and Incentive Plans under which it is authorized to grant stock options and stock appreciation rights. As of December 31, 2012, there were 3,449,781 options available for grant under the plans. The Company established an Executive Incentive Plan to align executive incentives with increases in stockholder value. The stockholders of the Company most recently approved an amendment to the plan in 2010 at the Company's annual meeting. Compensation payable under this plan is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code. The Company also has a Deferred Compensation Plan to provide additional retirement plan flexibility for our officers. The plan provides officers and directors the opportunity to voluntarily defer compensation on a pre-tax basis, and to notionally invest such deferred amounts in one or more specified measurement funds. The Company has a Long-Term Stock and Investment Plan (the "Long-Term Stock and Investment Plan"), under which the Company may grant cash awards that can be notionally invested in one or more specified measurement funds. The Company implemented the Long-Term Equity Incentive Plans in 2010, 2011 and 2012 under which the Company grants equity interests to employees and officers. Under the plans, equity interests may be granted to management from time to time, with vesting, forfeiture and repurchase arrangements established under the plans at the time of grant. The equity interest structure is similar to the equity structure employed with the Company's Affiliate principals, with a ratable portion of ownership interests in all Affiliates transferred to a partnership, with grants of equity interests that have rights to cash flow deferred seven years from the date of grant. Stock Options Pursuant to the option plans discussed above, stock options generally vest over a period of three to five years and expire seven to ten years after the grant date. All options have been granted with exercise prices equal to the fair market value of the Company's common stock on the date of grant. The following table summarizes the transactions of the Company's stock options:
|  | Stock Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years) |
--- | --- | --- | --- | --- | --- | --- | ---
Unexercised options outstanding—January 1, 2012 |  |  | 5.1 |  | $ | 68.18 |  |  |  |
Options granted |  |  | 0.1 |  |  | 121.90 |  |  |  |
Options exercised |  |  | (1.4 | ) |  | 54.45 |  |  |  |
Options forfeited |  |  | 0.0 |  |  | 85.72 |  |  |  |
Unexercised options outstanding—December 31, 2012 |  |  | 3.8 |  |  | 74.04 |  |  | 4.1 |
Exercisable at December 31, 2012 |  |  | 2.5 |  |  | 68.64 |  |  | 3.6 |
The fair value of options granted is estimated using the Black-Scholes option pricing model. The weighted average fair value of options granted during the years ended December 31, 2010, 2011 and 2012 was $23.54, $30.27 and $40.43 per option, respectively, based on the assumptions stated below.
|  | For the Years Ended December 31, |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
Dividend yield |  |  | 0.0 | % |  | 0.0 | % |  | 0.0 | %
Expected volatility(1) |  |  | 32.4 | % |  | 33.1 | % |  | 36.8 | %
Risk-free interest rate(2) |  |  | 1.6 | % |  | 1.3 | % |  | 0.7 | %
Expected life of options (in years)(3) |  |  | 4.5 |  |  | 4.8 |  |  | 5.0 |
Forfeiture rate(3) |  |  | 4.8 | % |  | 2.4 | % |  | 1.4 | %
(1) Based on historical and implied volatility. (2) Based on the U.S. Treasury yield curve in effect at the date of grant. (3) Based on the Company's historical data and expected exercise behavior. The Company generally uses treasury stock to settle stock option exercises. The total intrinsic value of options exercised during the years ended December 31, 2010, 2011 and 2012 was $42.3 million, $35.4 million and $86.8 million, respectively. As of December 31, 2012, the intrinsic value of exercisable options outstanding was $154.2 million and 3.4 million options are available for future grant under the Company's option plans. Restricted Stock Under the Company's Executive Incentive Plan and Long-Term Stock and Investment Plan, the Company periodically grants awards denominated in the Company's common stock. The Company granted awards with fair values of $1.0 million, $3.3 million, and $18.1 million in 2010, 2011 and 2012, respectively. The Company may elect to settle the awards in shares of the Company's common stock or cash. The grant date fair value of the awards is based on the closing price of the Company's common stock on the date of grant. The following table summarizes the transactions of the Company's restricted stock:
|  | Restricted Stock |  | Weighted Average Grant Date Value |
--- | --- | --- | --- | --- | ---
Units outstanding—January 1, 2012 |  |  | 0.4 |  | $ | 52.66 |
Units granted |  |  | 0.2 |  |  | 127.33 |
Units issued |  |  | (0.2 | ) |  | 48.54 |
Units forfeited |  |  | (0.0 | ) |  | 52.33 |
Units outstanding—December 31, 2012 |  |  | 0.4 |  |  | 84.53 |
Long-Term Equity Incentive Plan Further to its retention and incentive objectives, the Company granted awards under the Company's Long-Term Equity Incentive Plans with aggregate fair values of $21.0 million, $14.6 million and $25.9 million during 2010, 2011 and 2012, respectively. These awards represent profits interests in the Company's Affiliates and recipients of these awards have rights to cash flows beginning in 2018. Recipients may require the Company to purchase their interests starting in 2016. Share-Based Incentive Compensation During the year ended December 31, 2011, the cash received and the actual tax benefit recognized for options exercised were $28.0 million and $8.2 million, respectively. During the year ended December 31, 2011, the excess tax benefit classified as a financing cash flow was $7.1 million. During the year ended December 31, 2012, the cash received and the actual tax benefit recognized for options exercised were $73.4 million and $25.5 million, respectively. During the year ended December 31, 2012, the excess tax benefit classified as a financing cash flow was $22.0 million. A summary of recent share-based compensation expense is as follows:
Period |  | Share-Based Compensation Expense |  | Tax Benefit |
--- | --- | --- | --- | --- | ---
2010 |  | $ | 19.5 |  | $ | 7.5 |
2011 |  |  | 30.3 |  |  | 11.6 |
2012 |  |  | 47.6 |  |  | 18.2 |
As of December 31, 2011, there was $80.0 million of compensation expense related to share-based compensation arrangements which will be recognized over a weighted average period of approximately three years (assuming no forfeitures). As of December 31, 2012, there was $78.4 million of compensation expense related to share-based compensation arrangements which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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