Stock Compensation

6 Months Ended

Apr. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The compensation cost recognized in the unaudited condensed consolidated statements of operations for the Company’s stock compensation arrangements was as follows:



	Three Months Ended April 30,						Six Months Ended April 30,
	2018			2017			2018			2017
	(in thousands)
Cost of products	$	3,460		$	2,813		$	6,843		$	5,812
Cost of maintenance and service	1,290			947			2,537			1,808
Research and development expense	15,150			12,568			30,546			25,452
Sales and marketing expense	6,875			4,807			13,496			9,936
General and administrative expense	6,190			4,427			11,866			8,388
Stock compensation expense before taxes	32,965			25,562			65,288			51,396
Income tax benefit	(6,336		)	(7,065		)	(12,548		)	(14,206		)
Stock compensation expense after taxes	$	26,629		$	18,497		$	52,740		$	37,190

In addition to the tax benefit disclosed above, the Company recorded net excess tax benefits from stock-based compensation in the provision for income taxes of $3.3 million and $10.8 million, respectively, for the three and six months ended April 30, 2018. The Company recorded net excess tax benefits from stock-based compensation in the provision for income taxes of $8.3 million and $11.3 million, respectively, for the three and six months ended April 30, 2017. As of April 30, 2018, there was $220.8 million of unamortized share-based compensation expense relating to options and restricted stock units and awards, which is expected to be amortized over a weighted-average period of approximately 2.3 years.

The intrinsic values of equity awards exercised during the periods are as follows:



	Three Months Ended April 30,				Six Months Ended April 30,
	2018		2017		2018		2017
	(in thousands)
Intrinsic value of awards exercised	$	12,017	$	22,369	$	30,792	$	28,656

In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting." The Company elected to early adopt ASU 2016-09 in the first quarter of fiscal 2017. As required by ASU 2016-09, excess tax benefits recognized on stock-based compensation expense are classified as an operating activity in the consolidated statements of cash flows and the Company has elected to apply this provision on a prospective basis. The Company also elected to account for forfeitures as they occur and recorded a one-time adoption expense of $0.4 million to retained earnings. See Note 15. Taxes for additional information on tax impacts.