Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2013

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, 2013 was as follows:

	2013		2012		2011
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	81,467	$	71,533	$	75,574
Sales, general and administrative expenses	45,836		42,752		42,652
Total stock-based compensation expense included in costs and expenses	$	127,303	$	114,285	$	118,226

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2013 was as follows:

	2013			2012			2011
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	85,067		$	79,047		$	83,098
Restricted stock and restricted stock units	36,479			29,194			30,708
ESPP share issuances	6,805			7,298			5,462
Less: stock-based compensation expense capitalized to inventories	(1,048		)	(1,254		)	(1,042		)
Total stock-based compensation expense included in costs and expenses	$	127,303		$	114,285		$	118,226

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, 2013, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2013
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	141,283	2.56
Restricted stock and restricted stock units	$	73,490	2.47
ESPP share issuances	$	5,956	0.67

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

The fair value of each option granted during 2013, 2012 and 2011 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2013		2012		2011
Expected stock price volatility	46.20	%	47.93	%	49.53	%
Risk-free interest rate	1.25	%	0.95	%	2.09	%
Expected term of options (in years)	5.81		5.78		5.74
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 2013, 2012 and 2011:

	2013		2012		2011
Expected stock price volatility	54.69	%	46.90	%	51.32	%
Risk-free interest rate	0.08	%	0.16	%	0.08	%
Expected term (in years)	0.74		0.74		0.72
Expected annual dividends	—		—		—