STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2016

STOCK-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

The following table presents the stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2016			2015			2016			2015
Cost of revenues	$	3,117		$	2,285		$	8,711		$	6,519
Operating expenses		7,701			5,806			21,923			16,486
Total stock-based compensation before tax	$	10,818		$	8,091		$	30,634		$	23,005
Income tax benefit	$	(3,227	)	$	(2,326	)	$	(8,917	)	$	(6,437	)

During the nine months of 2016, the Company issued approximately 812,000 shares of common stock to its employees and 18,000 shares of common stock to its non-employee directors under the Company’s share-based compensation plans.

During the nine months of 2016, the Company granted approximately 1,802,000 restricted stock units (“RSUs”) and 2,567,000 non-qualified stock options to its employees with total fair values of approximately $45.5 million and $21.2 million, respectively. This includes approximately 225,000 RSUs which were granted in connection with the election by employees to receive 50% of their 2016 target incentive compensation under the Company’s Corporate Incentive Compensation Plan in the form of RSUs instead of cash. Stock-based compensation of approximately $5.6 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date. During the nine months of 2016, the Company also granted approximately 36,000 RSUs to its non-employee directors with a total fair value of $1 million, which primarily vested 25% on the grant date and will vest 25% quarterly thereafter.

The Company recognizes stock based compensation on the accelerated recognition method, treating each vesting tranche as if it were an individual grant. As of September 30, 2016, the Company had approximately $51.1 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 2.1 years.