Napa Auto Parts 2014 Annual Report Download - page 61

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Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
December 31, 2014
Rental expense for operating leases was approximately $233,000,000, $208,000,000, and $158,200,000 for
2014, 2013, and 2012, respectively.
5. Share-Based Compensation
At December 31, 2014, total compensation cost related to nonvested awards not yet recognized was approx-
imately $28,800,000. The weighted-average period over which this compensation cost is expected to be recog-
nized is approximately three years. The aggregate intrinsic value for options and RSUs outstanding at
December 31, 2014 and 2013 was approximately $198,100,000 and $154,000,000, respectively. The aggregate
intrinsic value for options and RSUs vested totaled approximately $116,200,000 and $93,600,000 at
December 31, 2014 and 2013, respectively. At December 31, 2014, the weighted-average contractual life for
outstanding and exercisable options and RSUs was six and five years, respectively. Share-based compensation
cost of $16,239,000, $12,648,000, and $10,747,000, was recorded for the years ended December 31, 2014, 2013,
and 2012, respectively. The total income tax benefit recognized in the consolidated statements of income and
comprehensive income for share-based compensation arrangements was approximately $6,500,000, $5,100,000,
and $4,300,000, for 2014, 2013, and 2012, respectively. There have been no modifications to valuation method-
ologies or methods during the years ended December 31, 2014, 2013, and 2012.
For the years ended December 31, 2014, 2013 and 2012 the fair value for options and SARs granted was
estimated using a Black-Scholes option pricing model with the following weighted-average assumptions,
respectively: risk-free interest rate of 2.8%, 2.0%, and 2.0%; dividend yield of 2.8%, 3.2%, and 3.3%; annual
historical volatility factor of the expected market price of the Company’s common stock of 19% for each of the
three years; an average expected life and estimated turnover based on the historical pattern of existing grants of
approximately seven years and 5.0%, respectively. The fair value of RSUs is based on the price of the Compa-
ny’s stock on the date of grant. The total fair value of shares vested during the years ended December 31, 2014,
2013, and 2012, was $13,800,000, $8,100,000, and $6,700,000, respectively.
A summary of the Company’s share-based compensation activity and related information is as follows:
2014
Shares (1)
Weighted-
Average
Exercise
Price (2)
(In Thousands)
Outstanding at beginning of year ................................. 4,580 $56
Granted ................................................... 845 87
Exercised ................................................. (1,392) 49
Forfeited .................................................. (110) 71
Outstanding at end of year (3) ................................... 3,923 $64
Exercisable at end of year ...................................... 2,141 $55
Shares available for future grants ................................. 2,718
(1) Shares include Restricted Stock Units (RSUs).
(2) The weighted-average exercise price excludes RSUs.
(3) The exercise prices for options and SARs outstanding as of December 31, 2014 ranged from approximately
$42 to $87. The weighted-average remaining contractual life of all options and SARs outstanding is approx-
imately seven years.
F-17