Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2012

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, 2012 was as follows:

	2012		2011		2010
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	71,533	$	75,574	$	65,198
Sales, general and administrative expenses	42,752		42,652		25,926
Total stock-based compensation expense included in costs and expenses	$	114,285	$	118,226	$	91,124

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2012 was as follows:

	2012			2011			2010
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	79,047		$	83,098		$	64,005
Restricted stock and restricted stock units	29,194			30,708			22,960
ESPP share issuances	7,298			5,462			4,159
Less stock-based compensation expense capitalized to inventories	(1,254		)	(1,042		)	—
Total stock-based compensation expense included in costs and expenses	$	114,285		$	118,226		$	91,124

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, 2012 by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2012
	Unrecognized Expense Net of Estimated Forfeitures	Weighted-average Recognition Period
	(in thousands)	(in years)
Type of award:
Stock options	$156,225	2.69
Restricted stock and restricted stock units	68,094	2.58
ESPP share issuances	5,661	0.65

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

The fair value of each option granted during 2012, 2011 and 2010 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2012		2011		2010
Expected stock price volatility	47.93	%	49.53	%	52.17	%
Risk-free interest rate	0.95	%	2.09	%	2.44	%
Expected term of options (in years)	5.78		5.74		5.71
Expected annual dividends	—		—		—

Schedule of assumptions used to estimate the grant date fair value employee stock purchase plan

he following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2012, 2011 and 2010:

	2012		2011		2010
Expected stock price volatility	46.90	%	51.32	%	43.92	%
Risk-free interest rate	0.16	%	0.08	%	0.24	%
Expected term (in years)	0.74		0.72		0.71
Expected annual dividends	—		—		—