Note 14. Share-Based Compensation

3 Months Ended

Mar. 31, 2013

Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]

Share-Based Compensation Disclosure

14. Share-Based Compensation

We measure share-based compensation cost at the grant date based on the fair value of the award and recognize this cost as compensation expense over the required or estimated service period for awards expected to vest, in accordance with ASC 718, Compensation - Stock Compensation. The share-based compensation expense that we recognized in our condensed consolidated statements of operations for the three months ended March 31, 2013 and March 31, 2012 was as follows (in thousands):

	Three Months Ended
	March 31, 2013		March 31, 2012
Share-based compensation expense included in:
Cost of sales	$	4,516	$	8,258
Research and development	1,933		3,221
Selling, general and administrative	9,719		11,296
Production start-up	320		653
Restructuring	—		166
Total share-based compensation expense	$	16,488	$	23,594

The share-based compensation expense that we recognize in our results of operations is based on the number of awards expected to ultimately vest; therefore, the actual award amounts have been reduced for estimated forfeitures. ASC 718 requires us to estimate the number of awards that we expect to vest at the time the awards are granted and revise those estimates, if necessary, in subsequent periods. We estimate the number of awards that we expect to vest based on our historical experience with forfeitures, giving consideration to whether future forfeiture behavior might be expected to differ from past behavior. We recognize compensation cost for awards with graded vesting schedules on a straight-line basis over the requisite service periods for each separately vesting portion of the awards as if each award was in substance multiple awards.

Our forfeiture rate assumptions, which estimates the share-based awards that will ultimately vest, requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period of change and could be materially different from share-based compensation expense recorded in prior periods.

The following table presents our share-based compensation expense by type of award for the three months ended March 31, 2013 and March 31, 2012 (in thousands):

	Three Months Ended
	March 31, 2013			March 31, 2012
Stock options	$	—		$	231
Restricted and performance stock units	18,436			24,012
Unrestricted stock	300			175
Stock purchase plan	237			235
Net amount absorbed into inventory	(2,485		)	(1,059		)
Total share-based compensation expense	$	16,488		$	23,594

Share-based compensation cost capitalized in our inventory was $6.9 million and $4.5 million at March 31, 2013 and December 31, 2012, respectively. As of March 31, 2013, we had no unrecognized share-based compensation cost related to unvested stock option awards, and $121.6 million of unrecognized share-based compensation cost related to unvested restricted and performance stock units, which we expect to recognize as an expense over a weighted-average period of approximately 2.3 years.