Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-based compensation expense by line item

The effect of stock-based compensation expense during the three years ended December 31, 2019 was as follows:

	2019			2018		2017
	(in thousands)
Stock-based compensation expense by line item:
Cost of sales	$	5,575		$	4,543	$	2,500
Research and development expenses	224,558			203,112		181,900
Sales, general and administrative expenses	130,356			117,392		108,836
Total stock-based compensation expense included in costs and expenses	360,489			325,047		293,236
Income tax effect	(124,225		)	—		—
Total stock-based compensation included in costs and expenses, net of tax	$	236,264		$	325,047	$	293,236

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2019 was as follows:

	2019			2018			2017
	(in thousands)
Stock-based compensation expense by type of award:
Restricted stock and restricted stock units (including PSUs)	$	254,276		$	207,845		$	181,258
Stock options	96,737			107,854			105,367
ESPP share issuances	11,196			9,933			9,017
Stock-based compensation expense related to inventories	(1,720		)	(585		)	(2,406		)
Total stock-based compensation expense included in costs and expenses	$	360,489		$	325,047		$	293,236

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, 2019, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2019
	Unrecognized Expense		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Restricted stock and restricted stock units (including PSUs)	$	374,185	2.05
Stock options	$	130,153	2.50
ESPP share issuances	$	4,724	0.55

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

The fair value of each option granted during 2019, 2018 and 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2019		2018		2017
Expected stock price volatility	36.99	%	40.50	%	45.31	%
Risk-free interest rate	2.32	%	2.61	%	1.94	%
Expected term of options (in years)	4.27		4.55		4.68
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 2019, 2018 and 2017:

	2019		2018		2017
Expected stock price volatility	33.43	%	36.51	%	39.09	%
Risk-free interest rate	2.08	%	2.36	%	1.24	%
Expected term (in years)	0.74		0.75		0.75
Expected annual dividends	—		—		—