Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2017

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

Stock-based compensation expense by line item

The effect of stock-based compensation expense during the three years ended December 31, 2017 was as follows:

	2017		2016		2015
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	181,900	$	153,451	$	152,955
Sales, general and administrative expenses	108,836		84,254		78,070
Total stock-based compensation expense included in costs and expenses	$	290,736	$	237,705	$	231,025

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2017 was as follows:

	2017			2016			2015
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	105,367		$	114,768		$	129,276
Restricted stock and restricted stock units (including PSUs)	181,258			118,709			98,811
ESPP share issuances	9,017			7,835			7,025
Less: stock-based compensation expense capitalized to inventories	(4,906		)	(3,607		)	(4,087		)
Total stock-based compensation expense included in costs and expenses	$	290,736		$	237,705		$	231,025

Unrecognized stock-based compensation expense, net of estimated forfeitures

The following table sets forth the Company’s unrecognized stock-based compensation expense as of December 31, 2017, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2017
	Unrecognized Expense		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	147,402	2.45
Restricted stock and restricted stock units (including PSUs)	$	254,302	2.47
ESPP share issuances	$	4,245	0.59

Schedule of assumptions used to estimate the grant date fair value of options

The fair value of each option granted during 2017, 2016 and 2015 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2017		2016		2015
Expected stock price volatility	45.31	%	46.77	%	47.29	%
Risk-free interest rate	1.94	%	1.32	%	1.61	%
Expected term of options (in years)	4.68		4.91		5.28
Expected annual dividends	—		—		—

Schedule of assumptions used to estimate the grant date fair value employee stock purchase plan

The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2017, 2016 and 2015:

	2017		2016		2015
Expected stock price volatility	39.09	%	48.22	%	47.20	%
Risk-free interest rate	1.24	%	0.56	%	0.40	%
Expected term (in years)	0.75		0.75		0.72
Expected annual dividends	—		—		—