Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2018

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, 2018 was as follows:

	2018		2017		2016
	(in thousands)
Stock-based compensation expense by line item:
Cost of sales	$	4,543	$	2,500	$	2,918
Research and development expenses	203,112		181,900		153,451
Sales, general and administrative expenses	117,392		108,836		84,254
Total stock-based compensation expense included in costs and expenses	$	325,047	$	293,236	$	240,623

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2018 was as follows:

	2018			2017			2016
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	107,854		$	105,367		$	114,768
Restricted stock and restricted stock units (including PSUs)	207,845			181,258			118,709
ESPP share issuances	9,933			9,017			7,835
Stock-based compensation expense related to inventories	(585		)	(2,406		)	(689		)
Total stock-based compensation expense included in costs and expenses	$	325,047		$	293,236		$	240,623

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, 2018, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2018
	Unrecognized Expense		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	155,465	2.64
Restricted stock and restricted stock units (including PSUs)	$	321,683	2.58
ESPP share issuances	$	5,132	0.58

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

The fair value of each option granted during 2018, 2017 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2018		2017		2016
Expected stock price volatility	40.50	%	45.31	%	46.77	%
Risk-free interest rate	2.61	%	1.94	%	1.32	%
Expected term of options (in years)	4.55		4.68		4.91
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 2018, 2017 and 2016:

	2018		2017		2016
Expected stock price volatility	36.51	%	39.09	%	48.22	%
Risk-free interest rate	2.36	%	1.24	%	0.56	%
Expected term (in years)	0.75		0.75		0.75
Expected annual dividends	—		—		—