Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss):



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
	(In millions)
Total stock-based compensation expense:
Equity classified awards expense	$	2.4		$	1.3		$	8.1		$	9.0
Liability classified awards expense (credit)	1.4			0.0			2.3			(1.1		)
Total pre-tax stock-based compensation expense	3.8			1.3			10.4			7.9
Book income tax benefit	(1.0		)	(0.5		)	(2.7		)	(3.0		)
Total stock-based compensation expense, net of tax	$	2.8		$	0.8		$	7.7		$	4.9

As of September 30, 2018, total unrecognized compensation expense of $20.1 million related to restricted stock and restricted stock units and $4.1 million related to stock options are expected to be recognized over a weighted average period of 1.8 years for restricted stock and restricted stock units and 1.7 years for stock options.

Fair Value Assumptions

The Company granted 223,570 stock options during the nine months ended September 30, 2018 for which the fair value was estimated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:



Risk-free interest rate	2.6	%
Weighted average historical volatility	26.1	%
Dividend yield	3.6	%
Expected years until exercise	4.6
Weighted average fair value of options granted	$11.94

The Company granted 25,330 performance-based stock options and 26,670 performance-based restricted stock units during the nine months ended September 30, 2018 for which the fair value was estimated using a Monte Carlo simulation method. The following summarizes the assumptions used in estimating the fair values:



Risk-free interest rate	2.4	%
Weighted average historical volatility	33.0	%
Dividend yield	3.7	%
Expected years until exercise	3.0
Weighted average fair value of options granted	$9.79
Weighted average fair value of restricted stock units granted	$34.53

Equity Classified Awards - Stock Options

Stock option balances at September 30, 2018, and activity for the nine months ended September 30, 2018 were as follows:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2017	1,272,048		$	61.44
Granted	248,899		69.12
Exercised	(73,741	)	52.72
Forfeited	(6,309	)	68.80
Outstanding at September 30, 2018	1,440,897		63.18		6.9	$	30.4
Vested at September 30, 2018 and Expected to Vest	1,279,379		64.78		6.6	$	25.5
Exercisable at September 30, 2018	572,957		$	77.64	3.8	$	6.2

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the third quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2018. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of September 30, 2018, and activity related to restricted stock and restricted stock units for the nine months ended September 30, 2018 were as follows:



	Restricted Stock		Weighted Average Grant Date Fair Value		Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017	275,191		$	65.81	303,348		$	28.39
Granted	91,448		68.96		55,584		48.12
Released	(65,704	)	81.68		(15,737	)	98.54
Forfeited	(23,666	)	61.09		(71	)	53.49
Outstanding at September 30, 2018	277,269		$	63.61	343,124		$	27.70

Liability Classified Awards - Cash-settled Restricted Stock Units

The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end. During the nine months ended September 30, 2018, 59,229 units were issued, 60 units were vested and 3,806 units were forfeited. At September 30, 2018, there were 55,363 units outstanding. For the three and nine months ended September 30, 2018, $0.3 million and $0.7 million was included as stock-based compensation expense related to cash-settled restricted stock units.

Liability Classified Awards - Long-Term Incentive Awards

The Company has granted cash long-term incentive awards (“LTIP awards”) to certain employees. Annual LTIP awards vest over a three-year period and are determined using a multiplier from 0% to 200% of the target award based on the total stockholder return of Dine Brands Global common stock compared to the total stockholder returns of a peer group of companies. Although LTIP awards are only paid in cash, since the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are classified as liabilities. For the three months ended September 30, 2018 and 2017, $1.1 million and less than $0.1 million, respectively was included in total stock-based compensation expense related to LTIP awards. For the nine months ended September 30, 2018 and 2017, an expense of $1.6 million and a credit of $1.0 million, respectively, were included in total stock-based compensation expense related to LTIP awards. At September 30, 2018 and December 31, 2017, liabilities of $1.8 million and $0.2 million, respectively, related to LTIP awards were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets.