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Stockholders' Equity (Tables)
9 Months Ended
Sep. 30, 2016
Earnings Per Common Share  
Schedule of components of basic and diluted earnings per share

The components of basic and diluted earnings per common share comprised the following (in millions, except per share amounts):

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

161.8 

 

$

464.4 

 

$

603.4 

 

$

547.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares — basic

 

43.2 

 

45.5 

 

44.3 

 

46.1 

 

Effect of dilutive securities(1):

 

 

 

 

 

 

 

 

 

Warrants

 

2.3 

 

3.0 

 

2.3 

 

3.1 

 

Stock options, restricted stock units and employee stock purchase plan

 

0.7 

 

1.2 

 

0.7 

 

1.4 

 

Convertible notes

 

 

0.5 

 

 

1.1 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares — diluted(2)

 

46.2 

 

50.2 

 

47.3 

 

51.7 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

3.75 

 

$

10.20 

 

$

13.62 

 

$

11.86 

 

Diluted

 

$

3.50 

 

$

9.24 

 

$

12.76 

 

$

10.58 

 

 

 

 

 

 

 

 

 

 

 

Stock options and warrants excluded from calculation(2)

 

5.3 

 

3.0 

 

5.3 

 

4.1 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Calculated using the treasury stock method.

 

(2)

Certain convertible notes, stock options and warrants have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive. Under our convertible note hedge agreement, we were entitled to receive shares required to be issued to investors upon conversion of our Convertible Notes. Since related shares used to compute dilutive earnings per share would be anti-dilutive, they have been excluded from the calculation above.

Stock Options  
Stock Option Plan  
Weighted-average assumptions used to measure the fair value of the stock options granted

 

 

 

September 30,
2016

 

September 30,
2015

 

Expected volatility

 

34.8 

%

33.1 

%

Risk-free interest rate

 

1.6 

%

2.0 

%

Expected term of awards (in years)

 

5.8 

 

5.8 

 

Expected forfeiture rate

 

5.4 

%

1.0 

%

Expected dividend yield

 

0.0 

%

0.0 

%

 

Schedule of stock option activity

 

 

 

Number of
Options

 

Weighted-
Average
Exercise
Price

 

Weighted
Average
Remaining
Contractual
Term (Years)

 

Aggregate
Intrinsic
Value
(in millions)

 

Outstanding at January 1, 2016

 

3,247,438

 

$

93.09

 

 

 

 

 

Granted

 

1,625,552

 

119.33

 

 

 

 

 

Exercised

 

(196,984

)

31.73

 

 

 

 

 

Forfeited

 

(165,492

)

120.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at September 30, 2016

 

4,510,514

 

$

104.21

 

7.2

 

$

83.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2016

 

3,278,204

 

$

98.49

 

6.3

 

$

81.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected to vest as of September 30, 2016

 

1,152,335

 

$

119.30

 

9.5

 

$

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of stock option exercise data

Stock option exercise data is summarized below (dollars in millions):

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Number of options exercised

 

42,443 

 

210,256 

 

196,984 

 

807,755 

 

Cash received

 

$

1.2 

 

$

8.6 

 

$

6.2 

 

$

33.0 

 

Total intrinsic value of options exercised

 

$

3.9 

 

$

25.3 

 

$

17.3 

 

$

101.1 

 

 

Schedule of total share-based compensation expense relating to stock options

Total share-based compensation expense relating to stock options and restricted stock units is as follows (in millions):

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Cost of product sales

 

$

0.1

 

$

 

$

0.3

 

$

 

Research and development

 

0.5

 

 

1.0

 

 

Selling, general and administrative

 

3.2

 

2.5

 

21.0

 

2.5

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense before taxes

 

3.8

 

2.5

 

22.3

 

2.5

 

Related income tax benefit

 

(1.4

)

(0.9

)

(8.2

)

(0.9

)

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense, net of taxes

 

$

2.4

 

$

1.6

 

$

14.1

 

$

1.6