Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of components of basic and diluted earnings per common 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,
	2017		2016		2017		2016
Numerator:
Net income	$	276.3	$	161.8	$	398.9	$	603.4

Denominator:
Weighted average outstanding shares — basic	43.4		43.2		44.3		44.3
Effect of dilutive securities(1):
Warrants	—		2.3		0.1		2.3
Stock options, restricted stock units and employee stock purchase plan	0.7		0.7		0.8		0.7

Weighted average shares — diluted(2)	44.1		46.2		45.2		47.3

Net income per common share:
Basic	$	6.37	$	3.75	$	9.00	$	13.62
Diluted	$	6.27	$	3.50	$	8.83	$	12.76

Stock options, convertible notes and warrants excluded from calculation(2)	3.7		5.3		3.1		5.3

(1)

Calculated using the treasury stock method.

(2)

Certain stock options and warrants have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive for the three- and nine-month periods ended September 30, 2017 and September 30, 2016. Additionally, certain convertible notes were excluded for the three- and nine-month periods ended September 30, 2016. 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

Summary of weighted-average assumptions used to measure the fair value of all stock options (including both time-vesting and performance-vesting awards) granted

	September 30, 2017		September 30, 2016
Expected volatility	35.7	%	34.8	%
Risk-free interest rate	2.2	%	1.6	%
Expected term of awards (in years)	6.1		5.8
Expected dividend yield	0.0	%	0.0	%

Schedule of the activity and status of stock options

	Number of Options		Weighted- Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2017	4,459,291		$	104.97
Granted	1,958,843		145.72
Exercised	(428,541	)	89.17
Forfeited/canceled	(64,586	)	132.86

Outstanding at September 30, 2017	5,925,007		$	119.28	7.3	$	64.4

Exercisable at September 30, 2017	3,114,975		$	102.70	5.7	$	63.8

Unvested as of September 30, 2017	2,810,032		$	137.66	9.1	$	0.6

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,
	2017		2016		2017		2016
Number of options exercised	40,565		42,443		428,541		196,984
Cash received	$	1.6	$	1.2	$	38.2	$	6.2
Total intrinsic value of options exercised	$	3.5	$	3.9	$	27.0	$	17.3

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

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Cost of product sales	$	0.4		$	0.1		$	0.9		$	0.3
Research and development	1.0			0.5			2.6			1.0
Selling, general and administrative	11.7			2.7			26.4			20.4

Share-based compensation expense before taxes	13.1			3.3			29.9			21.7
Related income tax benefit	(4.8		)	(1.1		)	(11.0		)	(7.9		)

Share-based compensation expense, net of taxes	$	8.3		$	2.2		$	18.9		$	13.8