Share-based Payments

3 Months Ended

Mar. 31, 2014

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

Share-based Payments

Share-based Payments

Share-based Compensation Expense

The following table summarizes share-based compensation expense included within our condensed consolidated statements of income:

	For the Three Months Ended March 31,
(In millions)	2014			2013
Research and development	$	29.4		$	25.2
Selling, general and administrative	47.2			34.3
Subtotal	76.6			59.5
Capitalized share-based compensation costs	(2.6		)	(2.3		)
Share-based compensation expense included in total cost and expenses	74.0			57.2
Income tax effect	(22.3		)	(16.6		)
Share-based compensation expense included in net income attributable to Biogen Idec Inc.	$	51.7		$	40.6

The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:

	For the Three Months Ended March 31,
(In millions)	2014			2013
Stock options	$	—		$	0.3
Market stock units	14.9			8.5
Time-vested restricted stock units	29.2			27.1
Cash settled performance units	21.4			20.4
Performance units	6.3			—
Employee stock purchase plan	4.8			3.2
Subtotal	76.6			59.5
Capitalized share-based compensation costs	(2.6		)	(2.3		)
Share-based compensation expense included in total cost and expenses	$	74.0		$	57.2

Grants Under Share-based Compensation Plans

The following table summarizes our equity grants to employees, officers and directors under our current stock plans:

	For the Three Months Ended March 31,
	2014	2013
Market stock units	214,000	253,000
Cash settled performance shares	172,000	270,000
Performance units	50,000	—
Time-vested restricted stock units	392,000	638,000

The market stock units (MSUs) granted in connection with our 2014 annual awards during the first quarter of 2014 primarily vest in three equal annual increments beginning on the anniversary of the grant date. For these grants, the performance multiplier is derived based on the stock price growth rate between the 30 calendar day average closing stock price on the grant date and the 30 calendar day average closing stock price leading up to and including each of the three vesting dates. These awards may ultimately earn between 0% and 200% of the target number of units granted based on actual stock performance. Any performance multiplier less than 50% results in no shares being earned for that respective tranche.

During the first quarter of 2014, we began granting awards for performance-vested restricted stock units, which can be settled in cash or shares of our common stock (PUs). PUs awarded to employees vest in three equal annual increments beginning on the anniversary of the grant date. The number of PUs granted represents the target number of units that are eligible to be earned based on the attainment of certain performance measures established at the beginning of the performance period, which ends on December 31^st of each year. Participants may ultimately earn between 0% and 200% of the target number of units granted based on the degree of actual performance metric achievement, with no units being earned if the performance multiplier is below 50%. Accordingly, additional PUs may be issued or currently outstanding PUs may be cancelled upon final determination of the number of units earned. PUs are settled in cash or shares at the sole discretion of the Compensation and Management Development Committee of the Board of Directors, with settlement based on the 30 calendar day average closing stock price through each vesting date once the actual vested and earned number of units is known.

In addition, for the three months ended March 31, 2014, approximately 74,000 shares were issued under our employee stock purchase plan (ESPP) compared to approximately 112,000 shares issued in the prior year comparative period.