Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2016

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, 2016 was as follows:

	2016		2015		2014
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	153,451	$	152,955	$	116,998
Sales, general and administrative expenses	84,254		78,070		60,544
Total stock-based compensation expense included in costs and expenses	$	237,705	$	231,025	$	177,542

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2016 was as follows:

	2016			2015			2014
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	114,768		$	129,276		$	99,961
Restricted stock and restricted stock units	118,709			98,811			70,678
ESPP share issuances	7,835			7,025			8,326
Less: stock-based compensation expense capitalized to inventories	(3,607		)	(4,087		)	(1,423		)
Total stock-based compensation expense included in costs and expenses	$	237,705		$	231,025		$	177,542

Unrecognized stock-based compensation expense, net of estimated forfeitures

The following table sets forth the Company’s unrecognized stock-based compensation expense, net of estimated forfeitures, as of December 31, 2016, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2016
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	157,819	2.50
Restricted stock and restricted stock units	$	176,972	2.39
ESPP share issuances	$	4,080	0.58

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

The fair value of each option granted during 2016, 2015 and 2014 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2016		2015		2014
Expected stock price volatility	46.77	%	47.29	%	50.86	%
Risk-free interest rate	1.32	%	1.61	%	1.77	%
Expected term of options (in years)	4.91		5.28		5.47
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 2016, 2015 and 2014:

	2016		2015		2014
Expected stock price volatility	48.22	%	47.20	%	60.32	%
Risk-free interest rate	0.56	%	0.40	%	0.09	%
Expected term (in years)	0.75		0.72		0.75
Expected annual dividends	—		—		—