STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2015

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

Stock-based compensation expense was reflected in the Company’s unaudited condensed consolidated statements of operations as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2015			2014			2015			2014
Cost of revenues	$	2,285		$	1,418		$	6,519		$	3,816
Operating expenses		5,806			3,850			16,486			9,905
Total stock-based compensation before tax	$	8,091		$	5,268		$	23,005		$	13,721
Income tax benefit	$	(2,326	)	$	(1,395	)	$	(6,437	)	$	(3,977	)

During the nine months of 2015, the Company issued approximately 825,000 shares of common stock to its employees and 31,000 shares to its non-employee directors under the Company’s share-based compensation plans.

During the nine months of 2015, the Company granted approximately 1,775,000 restricted stock units (“RSUs”) and 2,197,000 non-qualified stock options to its employees with total fair values of approximately $35.8 million and $16.6 million, respectively. Approximately 250,000 RSUs were granted in connection with the election by employees to receive 50% of their 2015 target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. Stock-based compensation of approximately $4.3 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date.

The Company recognizes stock based compensation on the accelerated recognition method, while treating each vesting tranche as if it were an individual grant. As of September 30, 2015, the Company had approximately $37 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to all unvested RSUs and unvested stock options that is expected to be recognized over a weighted-average period of 2.2 years.