XML 77 R22.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Share-based Payments | 12 Months Ended
--- | ---
Dec. 31, 2016
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 in our consolidated statements of income:
| For the Years Ended December 31,
(In millions) | 2016 |  | 2015 |  | 2014
Research and development | $ | 84.5 |  |  | $ | 88.6 |  |  | $ | 102.1 |
Selling, general and administrative | 121.7 |  |  | 127.3 |  |  | 150.3 |
Restructuring charges | (1.8 | ) |  | (8.6 | ) |  | — |
Subtotal | 204.4 |  |  | 207.3 |  |  | 252.4 |
Capitalized share-based compensation costs | (14.6 | ) |  | (11.0 | ) |  | (10.0 | )
Share-based compensation expense included in total cost and expenses | 189.8 |  |  | 196.3 |  |  | 242.4 |
Income tax effect | (54.0 | ) |  | (55.8 | ) |  | (72.2 | )
Share-based compensation expense included in net income attributable to Biogen Inc. | $ | 135.8 |  |  | $ | 140.5 |  |  | $ | 170.2 |
The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:
| For the Years Ended December 31,
(In millions) | 2016 |  | 2015 |  | 2014
Market stock units | $ | 38.4 |  |  | $ | 38.1 |  |  | $ | 37.4 |
Time-vested restricted stock units | 120.0 |  |  | 119.0 |  |  | 115.4 |
Cash settled performance units | 16.3 |  |  | 22.4 |  |  | 65.5 |
Performance units | 18.6 |  |  | 13.9 |  |  | 21.9 |
Employee stock purchase plan | 11.1 |  |  | 13.9 |  |  | 12.2 |
Subtotal | 204.4 |  |  | 207.3 |  |  | 252.4 |
Capitalized share-based compensation costs | (14.6 | ) |  | (11.0 | ) |  | (10.0 | )
Share-based compensation expense included in total cost and expenses | $ | 189.8 |  |  | $ | 196.3 |  |  | $ | 242.4 |
Windfall tax benefits from vesting of stock awards, exercises of stock options and ESPP participation were $12.6 million, $78.2 million and $96.4 million in 2016, 2015 and 2014, respectively. These amounts have been calculated under the alternative transition method. As of December 31, 2016, unrecognized compensation cost related to unvested share-based compensation was approximately $189.8 million, net of estimated forfeitures. We expect to recognize the cost of these unvested awards over a weighted-average period of 1.9 years. Share-Based Compensation Plans We have three share-based compensation plans pursuant to which awards are currently being made: (i) the Biogen Inc. 2006 Non-Employee Directors Equity Plan (2006 Directors Plan); (ii) the Biogen Inc. 2008 Amended and Restated Omnibus Equity Plan (2008 Omnibus Plan); and (iii) the Biogen Inc. 2015 Employee Stock Purchase Plan (ESPP). Directors Plan In May 2006 our stockholders approved the 2006 Directors Plan for share-based awards to our directors. Awards granted from the 2006 Directors Plan may include stock options, shares of restricted stock, restricted stock units, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. We have reserved a total of 1.6 million shares of common stock for issuance under the 2006 Directors Plan. The 2006 Directors Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares reserved under the plan in a 1.5-to-1 ratio. In June 2015 our stockholders approved an amendment to extend the term of the 2006 Directors Plan until June 2025. Omnibus Plans In June 2008 our stockholders approved the 2008 Omnibus Plan for share-based awards to our employees. Awards granted from the 2008 Omnibus Plan may include stock options, shares of restricted stock, restricted stock units, performance shares, shares of phantom stock, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. Shares of common stock available for issuance under the 2008 Omnibus Plan consist of 15.0 million shares reserved for this purpose, plus shares of common stock that remained available for issuance under our 2005 Omnibus Equity Plan on the date that our stockholders approved the 2008 Omnibus Plan, plus shares that were subject to awards under the 2005 Omnibus Equity Plan that remain unissued upon the cancellation, surrender, exchange or termination of such awards. The 2008 Omnibus Equity Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares available under the plan in a 1.5-to-1 ratio. We have not made any awards pursuant to the 2005 Omnibus Equity Plan since our stockholders approved the 2008 Omnibus Plan, and do not intend to make any awards pursuant to the 2005 Omnibus Equity Plan in the future, except that unused shares under the 2005 Omnibus Equity Plan have been carried over for use under the 2008 Omnibus Plan. Stock Options We currently do not grant stock options to our employees or directors. Outstanding stock options previously granted to our employees and directors generally have a ten-year term and vest over a period of between one and four years, provided the individual continues to serve at Biogen through the vesting dates. Options granted under all plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant. The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the options’ vesting periods. The fair value of the stock options granted in 2010 was estimated as of the date of grant using a Black-Scholes option valuation model. There were no grants of stock options made in 2016, 2015 and 2014. As of December 31, 2016, all outstanding options were exercisable. The expected life of options granted is derived using assumed exercise rates based on historical exercise patterns and represents the period of time that options granted are expected to be outstanding. Expected stock price volatility is based upon implied volatility for our exchange-traded options and other factors, including historical volatility. After assessing all available information on either historical volatility, implied volatility, or both, we have concluded that a combination of both historical and implied volatility provides the best estimate of expected volatility. The risk-free interest rate used is determined by the market yield curve based upon risk-free interest rates established by the Federal Reserve, or non-coupon bonds that have maturities equal to the expected term. The dividend yield of zero is based upon the fact that we have not historically granted cash dividends, and do not expect to issue dividends in the foreseeable future. Stock options granted prior to January 1, 2006 were valued based on the grant date fair value of those awards, using the Black-Scholes option pricing model, as previously calculated for pro-forma disclosures. The following table summarizes our stock option activity:
| Shares |  | Weighted Average Exercise Price
Outstanding at December 31, 2015 | 107,000 |  |  | $ | 53.94 |
Granted | — |  |  | $ | — |
Exercised | (41,000 | ) |  | $ | 53.75 |
Cancelled | — |  |  | $ | — |
Outstanding at December 31, 2016 | 66,000 |  |  | $ | 54.06 |
The total intrinsic values of options exercised in 2016, 2015 and 2014 totaled $10.4 million, $38.0 million and $42.7 million, respectively. The aggregate intrinsic values of options outstanding as of December 31, 2016 totaled $15.0 million. The weighted average remaining contractual term for options outstanding as of December 31, 2016 was 2.0 years. The following table summarizes the amount of tax benefit realized for stock options and cash received from the exercise of stock options:
| For the Years Ended December 31,
(In millions) | 2016 |  | 2015 |  | 2014
Tax benefit realized for stock options | $ | 4.0 |  |  | $ | 11.9 |  |  | $ | 13.0 |
Cash received from the exercise of stock options | $ | 2.2 |  |  | $ | 6.3 |  |  | $ | 8.5 |
Market Stock Units (MSUs) MSUs awarded to employees prior to 2014 vested in four equal annual increments beginning on the first anniversary of the grant date. Participants may ultimately earn between 0% and 150% of the target number of units granted based on actual stock performance. MSUs awarded to employees in 2014, 2015 and 2016 vest in three equal annual increments beginning on the first anniversary of the grant date, and participants may ultimately earn between 0% and 200% of the target number of units granted based on actual stock performance. The vesting of these awards is subject to the respective employee’s continued employment. The number of MSUs granted represents the target number of units that are eligible to be earned based on the attainment of certain market-based criteria involving our stock price. The number of MSUs earned is calculated at each annual anniversary from the date of grant over the respective vesting periods, resulting in multiple performance periods. Accordingly, additional MSUs may be issued or currently outstanding MSUs may be cancelled upon final determination of the number of awards earned. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period. The following table summarizes our MSU activity:
| Shares |  | Weighted Average Grant Date Fair Value
Unvested at December 31, 2015 | 269,000 |  |  | $ | 339.89 |
Granted (a) | 168,000 |  |  | $ | 328.03 |
Vested | (155,000 | ) |  | $ | 244.68 |
Forfeited | (52,000 | ) |  | $ | 371.62 |
Unvested at December 31, 2016 | 230,000 |  |  | $ | 355.60 |
(a) | MSUs granted in 2016 include approximately 15,000 and 20,000 MSUs issued in 2016 based upon the attainment of performance criteria set for 2013 and 2012, respectively, in relation to awards granted in those years. The remainder of MSUs granted during 2016 include awards granted in conjunction with our annual awards made in February 2016 and MSUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.
We value grants of MSUs using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, including the 60 calendar day average closing stock price on grant date for MSUs awarded prior to 2014, the 30 calendar day average closing stock price on the date of grant for MSUs awarded in 2014, 2015 and 2016, expected volatility of our stock price, risk-free rates of return and expected dividend yield. The assumptions used in our valuation are summarized as follows:
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Expected dividend yield | —% |  | —% |  | —%
Range of expected stock price volatility | 38.2% - 40.7% |  | 31.0% - 33.2% |  | 31.7% - 35.1%
Range of risk-free interest rates | 0.6% - 0.9% |  | 0.2% - 1.0% |  | 0.1% - 0.7%
30 calendar day average stock price on grant date | $260.67 - $304.86 |  | $277.35 - $426.27 |  | $280.88 - $335.65
Weighted-average per share grant date fair value | $328.03 |  | $493.43 |  | $395.22
The total fair values of MSUs vested in 2016, 2015 and 2014 totaled $39.3 million, $109.0 million and $117.4 million, respectively. Cash Settled Performance Units (CSPUs) CSPUs awarded to employees vest in three equal annual increments beginning on the first anniversary of the grant date. The vesting of these awards is subject to the respective employee’s continued employment with such awards settled in cash. The number of CSPUs 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 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. Accordingly, additional CSPUs may be issued or currently outstanding CSPUs may be cancelled upon final determination of the number of units earned. CSPUs awarded prior to 2014 are settled in cash based on the 60 calendar day average closing stock price through each vesting date once the actual vested and earned number of units is known. CSPUs awarded in 2014, 2015 and 2016 will be settled in cash 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. Since no shares are issued, these awards do not dilute equity. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period. The following table summarizes our CSPU activity:
| Shares
Unvested at December 31, 2015 | 192,000 |
Granted (a) | 86,000 |
Vested | (117,000 | )
Forfeited | (39,000 | )
Unvested at December 31, 2016 | 122,000 |
(a) | CSPUs granted in 2016 include awards granted in conjunction with our annual awards made in February 2016 and CSPUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.
The total cash paid in settlement of CSPUs vested in 2016, 2015 and 2014 totaled $31.9 million, $79.8 million and $92.8 million, respectively. Performance-vested Restricted Stock Units (PUs) In 2014 we revised our long term incentive program to include a new type of award granted to certain employees in the form of restricted stock units that may be settled in cash or shares of our common stock at the sole discretion of the Compensation and Management Development Committee of our Board of Directors. These awards are structured and accounted for the same way as the cash settled performance units, and vest in three equal annual increments beginning on the first 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 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. Accordingly, additional PUs may be issued or currently outstanding PUs may be cancelled upon final determination of the number of units earned. PUs settling in cash are 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. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period. The following table summarizes our PU activity:
| Shares
Unvested at December 31, 2015 | 103,000 |
Granted (a) | 55,000 |
Vested | (31,000 | )
Forfeited | (17,000 | )
Unvested at December 31, 2016 | 110,000 |
(a) | PUs granted in 2016 include awards granted in conjunction with our annual awards made in February 2016 and PUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.
During 2015 32,000 PU were converted to share settlements, of which approximately 11,000 shares were vested and issued. All other PUs that vested in 2015 were settled in cash totaling $12.4 million. All PUs that vested in 2016 were settled in cash totaling $8.1 million. Time-Vested Restricted Stock Units (RSUs) RSUs awarded to employees generally vest no sooner than one-third per year over three years on the anniversary of the date of grant, or upon the third anniversary of the date of the grant, provided the employee remains continuously employed with us, except as otherwise provided in the plan. Shares of our common stock will be delivered to the employee upon vesting, subject to payment of applicable withholding taxes. RSUs awarded to directors for service on our Board of Directors vest on the first anniversary of the date of grant, provided in each case that the director continues to serve on our Board of Directors through the vesting date. Shares of our common stock will be delivered to the director upon vesting and are not subject to any withholding taxes. The fair value of all RSUs is based on the market value of our stock on the date of grant. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period. The following table summarizes our RSU activity:
| Shares |  | Weighted Average Grant Date Fair Value
Unvested at December 31, 2015 | 810,000 |  |  | $ | 323.87 |
Granted (a) | 649,000 |  |  | $ | 268.52 |
Vested | (406,000 | ) |  | $ | 285.13 |
Forfeited | (165,000 | ) |  | $ | 310.30 |
Unvested at December 31, 2016 | 888,000 |  |  | $ | 303.49 |
(a) | RSUs granted in 2016 primarily represent RSUs granted in conjunction with our annual awards made in February 2016 and awards made in conjunction with the hiring of new employees. RSUs granted in 2016 also include approximately 11,000 RSUs granted to our Board of Directors.
RSUs granted in 2015 and 2014 had weighted average grant date fair values of $388.88 and $321.72, respectively. The total fair values of RSUs vested in 2016, 2015 and 2014 totaled $104.6 million, $239.7 million and $281.1 million, respectively. Employee Stock Purchase Plan (ESPP) In June 2015 our stockholders approved the Biogen Inc. 2015 ESPP (2015 ESPP). The 2015 ESPP, which became effective on July 1, 2015, replaced the Biogen Idec Inc. 1995 ESPP (1995 ESPP), which expired on June 30, 2015. The maximum aggregate number of shares of our common stock that may be purchased under the 2015 ESPP is 6.2 million. The following table summarizes our ESPP activity:
| For the Years Ended December 31,
(In millions, except share amounts) | 2016 |  | 2015 |  | 2014
Shares issued under the 2015 ESPP | 190,000 |  |  | 78,000 |  |  | **
Shares issued under the 1995 ESPP | — |  |  | 98,000 |  |  | 180,000 |
Cash received under the 2015 ESPP | $ | 41.5 |  |  | $ | 19.3 |  |  | **
Cash received under the 1995 ESPP | $ | — |  |  | $ | 30.0 |  |  | $ | 46.4 |

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration