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Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

The effect of stock-based compensation expense during the three years ended December 31, 2020 was as follows:


	2020		2019		2018
	(in thousands)
Stock-based compensation expense by line item:
Cost of sales	$	5,579	$	5,575	$	4,543
Research and development expenses	262,690		224,558		203,112
Sales, general and administrative expenses	161,192		130,356		117,392
Total stock-based compensation expense included in costs and expenses	429,461		360,489		325,047
Income tax effect	(146,959)		(124,225)		—
Total stock-based compensation included in costs and expenses, net of tax	$	282,502	$	236,264	$	325,047

Stock-Based Compensation Expense by Type of Award

The stock-based compensation expense by type of award during the three years ended December 31, 2020 was as follows:


	2020		2019		2018
	(in thousands)
Stock-based compensation expense by type of award:
Restricted stock units (including PSUs) and restricted stock	$	360,364	$	254,276	$	207,845
Stock options	59,722		96,737		107,854
ESPP share issuances	12,984		11,196		9,933
Stock-based compensation expense related to inventories	(3,609)		(1,720)		(585)
Total stock-based compensation expense included in costs and expenses	$	429,461	$	360,489	$	325,047

Unrecognized Stock-Based Compensation Expense

The following table sets forth the Company’s unrecognized stock-based compensation expense as of December 31, 2020, by type of award and the weighted-average period over which that expense is expected to be recognized:


	As of December 31, 2020
	Unrecognized Expense		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Restricted stock units (including PSUs) and restricted stock	$	401,100	1.88
Stock options	$	62,392	1.77
ESPP share issuances	$	11,333	0.59

Schedule of Assumptions Used to Estimate the Grant Date Fair Value of Options

The fair value of each option granted during 2020, 2019 and 2018 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	2020	2019	2018
Stock options granted	22,636	1,520,743	2,297,328

Expected stock price volatility	35.87%	36.99%	40.50%
Risk-free interest rate	0.43%	2.32%	2.61%
Expected term of options (in years)	4.67	4.27	4.55
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 2020, 2019 and 2018:


	2020	2019	2018
Expected stock price volatility	37.70%	33.43%	36.51%
Risk-free interest rate	0.11%	2.08%	2.36%
Expected term (in years)	0.71	0.74	0.75
Expected annual dividends	—	—	—