Stock Compensation

9 Months Ended

Jul. 31, 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 July 31,						Nine Months Ended July 31,
	2018			2017			2018			2017
	(in thousands)
Cost of products	$	3,820		$	3,358		$	10,663		$	9,170
Cost of maintenance and service	1,442			1,073			3,979			2,881
Research and development expense	18,412			13,617			48,958			39,069
Sales and marketing expense	7,317			5,494			20,813			15,430
General and administrative expense	6,261			4,759			18,127			13,147
Stock compensation expense before taxes	37,252			28,301			102,540			79,697
Income tax benefit	(7,111		)	(8,086		)	(19,574		)	(22,769		)
Stock compensation expense after taxes	$	30,141		$	20,215		$	82,966		$	56,928

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 $14.6 million and $25.4 million, respectively, for the three and nine months ended July 31, 2018. The Company recorded net excess tax benefits from stock-based compensation in the provision for income taxes of $18.4 million and $29.7 million, respectively, for the three and nine months ended July 31, 2017. As of July 31, 2018, there was $280.8 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 2.5 years.

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



	Three Months Ended July 31,				Nine Months Ended July 31,
	2018		2017		2018		2017
	(in thousands)
Intrinsic value of awards exercised	$	19,283	$	20,688	$	50,075	$	49,344

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.