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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2018
Share-based Compensation [Abstract]  
Stock-Based Compensation Stock-Based Compensation

We maintain the Second Amended and Restated 2010 Stock Incentive Plan (Stock Incentive Plan), which allows us to grant stock-based compensation awards, including stock options, restricted stock units, phantom stock, and unrestricted stock units. Under the Stock Incentive Plan, we have 12,623,538 shares of common stock reserved and authorized for issuance subject to stock splits, dividends, and other similar events. At December 31, 2018, 6,473,623 shares were available for grant under the Stock Incentive Plan. We issue new shares of common stock upon the exercise of stock options or when vesting conditions on restricted stock units are fully satisfied. These shares are subject to a fungible share provision such that the authorized share reserve is reduced by (i) one share for every one share subject to a stock option or share appreciation right granted under the Plan and (ii) 1.7 shares for every one share of common stock that was subject to an award other than an option or share appreciation right.

As part of the acquisition of SSNI, we reserved and authorized 2,322,371 shares, collectively, of Itron common stock to be issued under the Stock Incentive Plan for certain SSNI common stock awards that were converted to Itron common stock awards on January 5, 2018 (Acquisition Date) pursuant to the Agreement and Plan of Merger or were available for issuance pursuant to future awards under the Silver Spring Networks, Inc. 2012 Equity Incentive Plan (SSNI Plan). New stock-based compensation awards originally from the SSNI Plan may only be made to individuals who were not employees of Itron as of the Acquisition Date. Notwithstanding the foregoing, there is no fungible share provision for shares originally from the SSNI Plan. 

We also periodically award phantom stock units, which are settled in cash upon vesting and accounted for as liability-based awards with no impact to the shares available for grant.

In addition, we maintain the ESPP, for which 291,934 shares of common stock were available for future issuance at December 31, 2018.

Unrestricted stock and ESPP activity for the years ended December 31, 2018, 2017, and 2016 was not significant.

Stock-Based Compensation Expense
Total stock-based compensation expense and the related tax benefit were as follows:
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
(in thousands)
Stock options
$
3,675

 
$
2,695

 
$
2,357

Restricted stock units
26,859

 
17,738

 
14,723

Unrestricted stock awards
729

 
974

 
955

Phantom stock units
2,165

 
1,747

 
1,077

Total stock-based compensation
$
33,428

 
$
23,154

 
$
19,112

 
 
 
 
 
 
Related tax benefit
$
6,019

 
$
5,034

 
$
4,927



Stock Options
A summary of our stock option activity is as follows:
 
Shares
 
Weighted Average Exercise Price per Share
 
Weighted Average Remaining Contractual Life
 
Aggregate Intrinsic Value
 
Weighted Average Grant Date Fair Value
 
(in thousands)
 
 
 
(years)
 
(in thousands)
 
 
Outstanding, January 1, 2016
1,180

 
$
48.31

 
5.7
 
$
405

 
 
 
 
 
 
 
 
 
 
 
 
Granted
191

 
40.40

 
 
 
 
 
$
13.27

Exercised
(58
)
 
37.00

 
 
 
742

 
 
Forfeited
(36
)
 
35.29

 
 
 
 
 
 
Expired
(318
)
 
55.13

 
 
 
 
 
 
Outstanding, December 31, 2016
959

 
$
45.64

 
6.6
 
$
19,125

 
 
 
 
 
 
 
 
 
 
 
 
Granted
135

 
$
65.94

 
 
 
 
 
$
21.99

Exercised
(41
)
 
39.92

 
 
 
$
1,071

 
 
Forfeited
(35
)
 
47.38

 
 
 
 
 
 
Expired
(62
)
 
70.12

 
 
 
 
 
 
Outstanding, December 31, 2017
956

 
$
47.10

 
6.3
 
$
21,965

 
 
 
 
 
 
 
 
 
 
 
 
Converted upon acquisition
42

 
$
51.86

 
 
 
 
 
$
14.86

Granted
122

 
68.21

 
 
 
 
 
24.29

Exercised
(152
)
 
38.99

 
 
 
$
4,520

 
 
Forfeited
(7
)
 
60.03

 
 
 
 
 
 
Expired
(66
)
 
95.31

 
 
 
 
 
 
Outstanding, December 31, 2018
895

 
$
47.93

 
6.2
 
$
4,806

 
 
 
 
 
 
 
 
 
 
 
 
Exercisable, December 31, 2018
629

 
$
42.30

 
5.3
 
$
4,417

 
 
 
 
 
 
 
 
 
 
 
 
Expected to vest, December 31, 2018
266

 
$
61.23

 
8.4
 
$
389

 
 

At December 31, 2018, total unrecognized stock-based compensation expense related to unvested stock options was $2.6 million, which is expected to be recognized over a weighted average period of approximately 1.6 years.

The weighted-average assumptions used to estimate the fair value of stock options granted and the resulting weighted average fair value are as follows:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected volatility
30.5
%
 
32.5
%
 
33.5
%
Risk-free interest rate
2.8
%
 
2.0
%
 
1.3
%
Expected term (years)
6.1

 
5.5

 
5.5



Restricted Stock Units
The following table summarizes restricted stock unit activity:
 
Number of Restricted Stock Units
 
Weighted Average Grant Date Fair Value
 
Aggregate Intrinsic Value
 
(in thousands)
 
 
 
(in thousands)
Outstanding, January 1, 2016
756

 
 
 
 
 
 
 
 
 
 
Granted
306

 
$
41.58

 
 
Released
(312
)
 
 
 
$
11,944

Forfeited
(49
)
 
 
 
 
Outstanding, December 31, 2016
701

 
$
38.04

 
 
 
 
 
 
 
 
Granted
273

 
$
50.95

 
 
Released
(372
)
 
 
 
$
14,219

Forfeited
(46
)
 
 
 
 
Outstanding, December 31, 2017
556

 
$
47.68

 
 
 
 
 
 
 
 
Converted upon acquisition
579

 
$
69.40

 
 
Granted
387

 
57.48

 
 
Released
(593
)
 
54.91

 
$
32,567

Forfeited
(112
)
 
67.88

 
 
Outstanding, December 31, 2018
817

 
$
59.70

 
 
 
 
 
 
 
 
Vested but not released, December 31, 2018
124

 
 
 
$
5,867

 
 
 
 
 
 
Expected to vest, December 31, 2018
643

 
 
 
$
30,405


At December 31, 2018, total unrecognized compensation expense on restricted stock units was $38.5 million, which is expected to be recognized over a weighted average period of approximately 2.0 years.

The weighted-average assumptions used to estimate the fair value of performance-based restricted stock units granted and the resulting weighted average fair value are as follows:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected volatility
28.0
%
 
28.0
%
 
30.0
%
Risk-free interest rate
2.2
%
 
1.0
%
 
0.7
%
Expected term (years)
2.1

 
1.7

 
1.8

 
 
 
 
 
 
Weighted average grant date fair value
$
78.56

 
$
77.75

 
$
44.92



Phantom Stock Units
The following table summarizes phantom stock unit activity:

 
Number of Phantom Stock Units
 
Weighted
Average Grant
Date Fair Value
 
(in thousands)
 
 
Outstanding, January 1, 2017
62

 
 
Granted
32

 
$
65.55

Released
(20
)
 
 
Forfeited
(11
)
 
 
Outstanding, December 31, 2017
63

 
 
 
 
 
 
Expected to vest, December 31, 2017
63

 
 
 
 
 
 
Outstanding, January 1, 2018
63

 
$
62.53

Converted upon acquisition
21

 
69.40

Granted
41

 
66.67

Released
(35
)
 
54.33

Forfeited
(7
)
 
61.28

Outstanding, December 31, 2018
83

 
$
61.80

 
 
 
 
Expected to vest, December 31, 2018
83

 
 


At December 31, 2018, total unrecognized compensation expense on phantom stock units was $2.5 million, which is expected to be recognized over a weighted average period of approximately 1.9 years. As of December 31, 2018 and 2017, we have recognized a phantom stock liability of $1.5 million and $1.7 million, respectively, within wages and benefits payable in the Consolidated Balance Sheets.