Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014 was as follows:

	2014		2013		2012
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	116,998	$	81,183	$	71,243
Sales, general and administrative expenses	60,544		45,652		42,561
Total stock-based compensation expense included in costs and expenses	$	177,542	$	126,835	$	113,804

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2014 was as follows:

	2014			2013			2012
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	99,961		$	84,599		$	78,566
Restricted stock and restricted stock units	70,678			36,479			29,194
ESPP share issuances	8,326			6,805			7,298
Less: stock-based compensation expense capitalized to inventories	(1,423		)	(1,048		)	(1,254		)
Total stock-based compensation expense included in costs and expenses	$	177,542		$	126,835		$	113,804

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, 2014, by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of December 31, 2014
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	156,969	2.13
Restricted stock and restricted stock units	$	148,037	2.79
ESPP share issuances	$	4,262	0.61

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

The fair value of each option granted during 2014, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2014		2013		2012
Expected stock price volatility	50.86	%	46.20	%	47.93	%
Risk-free interest rate	1.77	%	1.25	%	0.95	%
Expected term of options (in years)	5.47		5.81		5.78
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 2014, 2013 and 2012:

	2014		2013		2012
Expected stock price volatility	60.32	%	54.69	%	46.90	%
Risk-free interest rate	0.09	%	0.08	%	0.16	%
Expected term (in years)	0.75		0.74		0.74
Expected annual dividends	—		—		—