Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2016	Apr. 29, 2016
Document Information [Line Items]
Trading Symbol	ALGN
Entity Registrant Name	ALIGN TECHNOLOGY INC
Entity Central Index Key	0001097149
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		80,184,259

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Income Statement [Abstract]

Net revenues

^[1]

$ 238,720

$ 198,086

Cost of net revenues

58,093

46,996

Gross profit

180,627

151,090

Operating expenses:

Selling, general and administrative

112,210

88,281

Research and development

15,083

13,885

Total operating expenses

127,293

102,166

Income from operations

53,334

48,924

Interest and other income (expenses), net

(427)

(1,452)

Net income before provision for income taxes

52,907

47,472

Provision for income taxes

12,361

11,295

Net income

$ 40,546

$ 36,177

Net income per share:

Basic (in usd per share)

$ 0.51

$ 0.45

Diluted (in usd per share)

$ 0.50

$ 0.44

Shares used in computing net income per share:

Basic (in shares)

79,831

80,459

Diluted (in shares)

81,320

81,824

[1]	Net revenues are attributed to countries based on location of where revenue is recognized.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 40,546	$ 36,177
Net change in cumulative translation adjustment	(150)	(261)
Change in unrealized gains (losses) on available-for-sale securities, net of tax	1,152	295
Other comprehensive income (loss)	1,002	34
Comprehensive income	$ 41,548	$ 36,211

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 154,418	$ 167,714
Marketable securities, short-term	393,660	359,581
Accounts receivable, net of allowances for doubtful accounts and returns of $2,770 and $2,472, respectively	178,000	158,550
Inventories	22,618	19,465
Prepaid expenses and other current assets	34,307	26,700
Total current assets	783,003	732,010
Marketable securities, long-term	132,690	151,370
Property, plant and equipment, net	148,029	136,473
Goodwill and intangible assets, net	78,606	79,162
Deferred tax assets	57,527	51,416
Other assets	7,705	8,202
Total assets	1,207,560	1,158,633
Current liabilities:
Accounts payable	36,258	34,354
Accrued liabilities	92,723	107,765
Deferred revenues	145,769	129,553
Total current liabilities	274,750	271,672
Taxes Payable	39,269	37,512
Other long-term liabilities	1,511	1,523
Total liabilities	$ 315,530	$ 310,707
Commitments and contingencies (Note 6 and 7)
Stockholders' equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)	$ 0	$ 0
Common stock, $0.0001 par value (200,000 shares authorized; 80,175 and 79,500 issued and outstanding, respectively)	8	8
Additional paid-in capital	824,063	821,507
Accumulated other comprehensive income (loss), net	22	(980)
Retained earnings	67,937	27,391
Total stockholders’ equity	892,030	847,926
Total liabilities and stockholders’ equity	$ 1,207,560	$ 1,158,633

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts receivable, allowance for doubtful accounts and returns	$ 2,770	$ 2,472
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	80,175	79,500
Common stock, shares outstanding	80,175	79,500

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 40,546	$ 36,177
Adjustments to reconcile net profit to net cash provided by operating activities:
Deferred taxes	(6,113)	(4,488)
Depreciation and amortization	4,792	4,308
Stock-based compensation	12,524	11,648
Tax (shortfalls) benefits from stock-based awards	7,220	4,779
Excess tax benefit from share-based payment arrangements	(8,082)	(4,779)
Other non-cash operating activities	3,754	2,614
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	(20,839)	(12,233)
Inventories	(3,155)	1,334
Prepaid expenses and other assets	(618)	(10,527)
Accounts payable	447	1,871
Accrued and other long-term liabilities	(14,544)	(1,078)
Deferred revenues	14,748	6,019
Net cash provided by operating activities	30,680	35,645
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(20,207)	(15,612)
Purchase of marketable securities	(143,926)	(113,508)
Proceeds from maturities of marketable securities	128,524	86,908
Proceeds from sales of marketable securities	293	5,505
Other investing activities	0	46
Net cash used in investing activities	(35,316)	(36,661)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	5,384	4,552
Common stock repurchases	0	(1,781)
Excess tax benefit from share-based payment arrangements	8,082	4,779
Employees’ taxes paid upon the vesting of restricted stock units	(22,572)	(14,647)
Net cash used in financing activities	(9,106)	(7,097)
Effect of foreign exchange rate changes on cash and cash equivalents	446	(1,780)
Net decrease in cash and cash equivalents	(13,296)	(9,893)
Cash and cash equivalents, beginning of the period	167,714	199,871
Cash and cash equivalents, end of the period	$ 154,418	$ 189,978

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2016
Notes To Financial Statements [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, or “Align”) in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and contain all adjustments, including normal recurring adjustments, necessary to present fairly our results of operations for the three months ended March 31, 2016 and 2015, our comprehensive income for the three months ended March 31, 2016 and 2015, our financial position as of March 31, 2016 and our cash flows for the three months ended March 31, 2016 and 2015. The Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from the December 31, 2015 audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or any other future period, and we make no representations related thereto. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America (“U.S.”) requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the fair values of financial instruments, long-lived assets and goodwill, useful lives of intangible assets and property and equipment, revenue recognition, stock-based compensation, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (" FASB") released Accounting Standards Update ("ASU") 2014-9 "Revenue from Contracts with Customers" to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the update by one year, with early adoption on the original effective date permitted. We are required to adopt this standard starting in the first quarter of fiscal year 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (ii) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. We have not yet selected a transition method, and are in the process of determining the impact that the new standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (topic 842). The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. This ASU will become effective for the Company on January 1, 2017. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Marketable Securities and Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Marketable Securities and Fair Value Measurements

Note 2. Marketable Securities and Fair Value Measurements

As of March 31, 2016 and December 31, 2015, the estimated fair value of our short-term and long-term marketable securities, classified as available for sale, are as follows (in thousands):

Short-term



March 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	55,972	$	—	$	—		$	55,972
Corporate bonds	181,508		79		(68		)	181,519
Municipal securities	9,718		11		(1		)	9,728
U.S. government agency bonds	74,709		17		(29		)	74,697
U.S. government treasury bonds	71,213		28		(11		)	71,230
U.S. dollar dominated foreign corporate bonds	506		—		—			506
Asset-backed securities	8		—		—			8
Total Marketable Securities, Short-Term	$	393,634	$	135	$	(109	)	$	393,660

Long-term



March 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	23,453	$	31	$	(6	)	$	23,478
Corporate bonds	72,034		221		(25		)	72,230
U.S. government treasury bonds	29,086		40		(6		)	29,120
Municipal securities	3,958		4		—			3,962
Certificates of deposit	2,700		—		—			2,700
Asset-backed securities	1,201		—		(1		)	1,200
Total Marketable Securities, Long-Term	$	132,432	$	296	$	(38	)	$	132,690

Short-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	38,537	$	—	$	—		$	38,537
Corporate bonds	179,765		6		(251		)	179,520
U.S. dollar dominated foreign corporate bonds	510		—		(2		)	508
Municipal securities	14,209		7		(2		)	14,214
U.S. government agency bonds	75,172		—		(53		)	75,119
U.S. government treasury bonds	51,763		1		(81		)	51,683
Total Marketable Securities, Short-Term	$	359,956	$	14	$	(389	)	$	359,581

Long-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	43,853	$	—	$	(178	)	$	43,675
Corporate bonds	64,012		9		(218		)	63,803
U.S. government treasury bonds	37,673		—		(107		)	37,566
Municipal securities	3,993		—		(2		)	3,991
Asset-backed securities	2,338		—		(3		)	2,335
Total Marketable Securities, Long-Term	$	151,869	$	9	$	(508	)	$	151,370

Cash and cash equivalents are not included in the table above as the gross unrealized gains and losses are not material. We have no material short-term or long-term investments that have been in a continuous unrealized loss position for greater than twelve months as of March 31, 2016 and December 31, 2015. Amounts reclassified to earnings from accumulated other comprehensive income related to unrealized gain or losses were immaterial for the three months ended March 31, 2016 and 2015. For the three months ended March 31, 2016 and 2015, realized gain or losses were immaterial.

Our fixed-income securities investment portfolio consists of commercial paper, corporate bonds, municipal securities, U.S. government agency bonds, U.S. government treasury bonds, U.S. dollar dominated foreign corporate bonds, certificates of deposits, and asset-backed securities that have a maximum maturity of 27 months. The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of these investments upon maturity or sale. The weighted average remaining duration of these securities was approximately and 9 months as of March 31, 2016 and December 31, 2015, respectively.

As the carrying value approximates the fair value for our short-term and long-term marketable securities shown in the tables above, the following table summarizes the fair value of our short-term and long-term marketable securities classified by maturity as of March 31, 2016 and December 31, 2015 (in thousands):



	March 31, 2016		December 31, 2015
Due in one year or less	$	393,660	$	359,581
Due in greater than one year	132,690		151,370
Total available for sale short-term and long-term marketable securities	$	526,350	$	510,951

Fair Value Measurements

We measure the fair value of our cash equivalents and marketable securities as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Our Level 1 assets consist of money market funds and U.S. government treasury bonds. We did not hold any Level 1 liabilities as of March 31, 2016 and December 31, 2015.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Our Level 2 assets consist of commercial paper, corporate bonds, certificates of deposits, U.S. government agency bonds, asset-backed securities, municipal securities, U.S. dollar dominated foreign corporate bonds and our Israeli funds that are mainly invested in insurance policies and foreign currency forward contracts. We obtain fair values for Level 2 investments from our asset manager for each of our portfolios. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates. The foreign currency forward contracts are valued using observable inputs such as quotations on forward foreign exchange rates.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

We did not hold any Level 3 assets or liabilities as of March 31, 2016 or December 31, 2015.

The following tables summarize our financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands):



Description	Balance as of March 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	67,608	$	67,608	$	—
Commercial paper	26,453		—		26,453
Corporate bonds	2,354		—		2,354
Short-term investments:
Commercial paper	55,972		—		55,972
Corporate bonds	181,519		—		181,519
Municipal securities	9,728		—		9,728
U.S. government agency bonds	74,697		—		74,697
U.S. government treasury bonds	71,230		71,230		—
U.S. dollar dominated foreign corporate bonds	506		—		506
Asset-backed securities	8		—		8
Long-term investments:
U.S. government agency bonds	23,478		—		23,478
Corporate bonds	72,230		—		72,230
U.S. government treasury bonds	29,120		29,120		—
Municipal securities	3,962		—		3,962
Asset-backed securities	1,200		—		1,200
Certificates of deposits	2,700		—		2,700
Prepaid expenses and other current assets:
Israeli funds	2,455		—		2,455
	$	625,220	$	167,958	$	457,262



Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	70,148	$	70,148	$	—
Commercial paper	36,887		—		36,887
U.S. government Agency bonds	3,599		—		3,599
Corporate bonds	625		—		625
Short-term investments:
Commercial paper	38,537		—		38,537
Corporate bonds	179,520		—		179,520
U.S. dollar denominated foreign corporate bonds	508		—		508
Municipal securities	14,214		—		14,214
U.S. government agency bonds	75,119		—		75,119
U.S. government treasury bonds	51,683		51,683		—
Long-term investments:
U.S. government agency bonds	43,675		—		43,675
Corporate bonds	63,803		—		63,803
U.S. government treasury bonds	37,566		37,566		—
Municipal securities	3,991		—		3,991
Asset-backed securities	2,335		—		2,335
Prepaid expenses and other current assets:
Israeli funds	2,436		—		2,436
	$	624,646	$	159,397	$	465,249

Derivative Financial Instruments

In September 2015, we began entering into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain trade and intercompany receivables and payables, which are classified within level 2 of the fair value hierarchy. The net loss on these forward contracts was immaterial for the three months ended March 31, 2016. The net gain or loss from the settlement of these foreign currency forward contracts is recorded in Interest and other income (expense), net in the Consolidated Statements of Operations. As of March 31, 2016, the fair value of foreign exchange forward contracts outstanding was a gain of $0.5 million.

The following table presents the gross notional value of all our foreign exchange forward contracts outstanding as of March 31, 2016 (in thousands):



	As of March 31, 2016
	Local Currency Amount		Notional Contract Amount (USD)
US dollar	$	22,700	$	22,700
Euro	€26,600		29,827
Japanese yen	¥460,000		4,048
Australian dollar	A$5,500		4,158
Hong Kong dollar	HK$	33,000	4,254
			$	64,987

Balance Sheet Components

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Balance Sheet Components

Inventories

Inventories consist of the following (in thousands):



	March 31, 2016		December 31, 2015
Raw materials	$	9,676	$	9,950
Work in process	9,939		7,067
Finished goods	3,003		2,448
Total Inventories	$	22,618	$	19,465

Work in process includes costs to produce our clear aligner and intra-oral products. Finished goods primarily represent our intra-oral scanners and ancillary products that support our clear aligner products.

Accrued liabilities

Accrued liabilities consist of the following (in thousands):



	March 31, 2016		December 31, 2015
Accrued payroll and benefits	$	44,201	$	55,430
Accrued sales and marketing expenses	9,015		7,071
Accrued sales rebates	7,759		8,486
Accrued accounts payable	7,343		13,834
Accrued sales tax and value added tax	4,863		4,801
Accrued professional fees	3,448		2,775
Accrued warranty	2,704		2,638
Accrued income taxes	1,793		2,646
Other accrued liabilities	11,597		10,084
Total Accrued Liabilities	$	92,723	$	107,765

Warranty

We regularly review the accrued warranty balances and update these balances based on historical warranty trends. Actual warranty costs incurred have not materially differed from those accrued; however, future actual warranty costs could differ from the estimated amounts.

Clear Aligner

We warrant our Invisalign products against material defects until the Invisalign case is complete. We accrue for warranty costs in cost of net revenues upon shipment of products. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on replacement costs.

Scanners

We warrant our scanners for a period of one year from the date of training and installation. We accrue for these warranty costs which includes materials and labor based on estimated historical repair costs. Extended service packages may be purchased for additional fees.

Warranty accrual as of March 31, 2016 and 2015 consists of the following activity (in thousands):



	Three Months Ended March 31,
	2016			2015
Balance at beginning of period	$	2,638		$	3,148
Charged to cost of net revenues	816			440
Actual warranty expenditures	(750		)	(583		)
Balance at end of period	$	2,704		$	3,005

Goodwill and Long-lived Assets

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Goodwill and Long-lived Assets

Goodwill

The change in the carrying value of goodwill for the three months ended March 31, 2016, all attributable to our Clear Aligner reporting unit, is as follows (in thousands):



	Clear Aligner
Balance as of December 31, 2015	$	61,074
Adjustments ¹	94
Balance as of March 31, 2016	$	61,168

¹The adjustments to goodwill during the three months ended March 31, 2016 were due to foreign currency translation.

During the fourth quarter of fiscal 2015, we performed the annual goodwill impairment testing and found no impairment events as the fair value of our Clear Aligner reporting unit was significantly in excess of the carrying value.

Acquired intangible assets are being amortized as follows (in thousands):



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of March 31, 2016		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of March 31, 2016
Trademarks	14	$	7,100	$	(1,527	)	$	(4,179	)	$	1,394
Existing technology	13	12,600		(3,718		)	(4,328		)	4,554
Customer relationships	11	33,500		(11,423		)	(10,751		)	11,326
Other	8	285		(121		)	—			164
Total Intangible Assets		$	53,485	$	(16,789	)	$	(19,258	)	$	17,438



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2015		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of December 31, 2015
Trademarks	15	$	7,100	$	(1,492	)	$	(4,179	)	$	1,429
Existing technology	13	12,600		(3,577		)	(4,328		)	4,695
Customer relationships	11	33,500		(10,957		)	(10,751		)	11,792
Other	8	285		(113		)	—			172
Total Intangible Assets		$	53,485	$	(16,139	)	$	(19,258	)	$	18,088

The total estimated annual future amortization expense for these acquired intangible assets as of March 31, 2016 is as follows (in thousands):



Fiscal Year Ending December 31,
Remainder of 2016	$	1,950
2017	2,600
2018	2,600
2019	2,592
2020	2,582
Thereafter	5,114
Total	$	17,438

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Credit Facilities	3 Months Ended
Credit Facilities	Mar. 31, 2016
Notes To Financial Statements [Abstract]
Credit Facilities	Credit Facilities On March 17, 2016, we amended the credit facility, originally entered into on March 22, 2013, and extended the maturity date to March 22, 2017. The credit facility provides for a $50.0 million revolving line of credit, with a $10.0 million letter of credit sublimit. The credit facility also requires us to maintain a minimum unrestricted cash balance of $50.0 million and comply with specific financial conditions and performance requirements. The loan bears interest, at our option, at a fluctuating rate per annum equal to the daily one-month adjusted LIBOR rate plus a spread of 1.75% or an adjusted LIBOR rate (based on one, three, six or twelve-month interest periods) plus a spread of 1.75%. As of March 31, 2016, we had no outstanding borrowings under this credit facility and were in compliance with the conditions and performance requirements.

Legal Proceedings (Notes)	3 Months Ended
Legal Proceedings (Notes)	Mar. 31, 2016
Legal Proceedings [Abstract]
Legal Proceedings	Legal Proceedings Securities Class Action Lawsuit On November 28, 2012, plaintiff City of Dearborn Heights Act 345 Police & Fire Retirement System filed a lawsuit against Align, Thomas M. Prescott (“Mr. Prescott”), Align’s former President and Chief Executive Officer, and Kenneth B. Arola (“Mr. Arola”), Align’s former Vice President, Finance and Chief Financial Officer, in the United States District Court for the Northern District of California on behalf of a purported class of purchasers of our common stock (the “Securities Action”). On July 11, 2013, an amended complaint was filed, which named the same defendants, on behalf of a purported class of purchasers of our common stock between January 31, 2012 and October 17, 2012. The amended complaint alleged that Align, Mr. Prescott and Mr. Arola violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and that Mr. Prescott and Mr. Arola violated Section 20(a) of the Securities Exchange Act of 1934. Specifically, the amended complaint alleged that during the purported class period defendants failed to take an appropriate goodwill impairment charge related to the April 29, 2011 acquisition of Cadent Holdings, Inc. in the fourth quarter of 2011, the first quarter of 2012 or the second quarter of 2012, which rendered our financial statements and projections of future earnings materially false and misleading and in violation of U.S. GAAP. The amended complaint sought monetary damages in an unspecified amount, costs and attorneys’ fees. On December 9, 2013, the court granted defendants’ motion to dismiss with leave for plaintiff to file a second amended complaint. Plaintiff filed a second amended complaint on January 8, 2014 on behalf of the same purported class. The second amended complaint states the same claims as the amended complaint. On August 22, 2014, the court granted our motion to dismiss without leave to amend. On September 22, 2014, Plaintiff filed a notice of appeal to the Ninth Circuit Court of Appeals. Align intends to vigorously defend itself against these allegations. Align is currently unable to predict the outcome of this amended complaint and therefore cannot determine the likelihood of loss nor estimate a range of possible loss, if any. Shareholder Derivative Lawsuit On February 1, 2013, plaintiff Gary Udis filed a shareholder derivative lawsuit against several of Align’s current and former officers and directors in the Superior Court of California, County of Santa Clara. The complaint alleges that our reported income and earnings were materially overstated because of a failure to timely write down goodwill related to the April 29, 2011 acquisition of Cadent Holdings, Inc., and that defendants made allegedly false statements concerning our forecasts. The complaint asserts various state law causes of action, including claims of breach of fiduciary duty, unjust enrichment, and insider trading, among others. The complaint seeks unspecified damages on behalf of Align, which is named solely as nominal defendant against whom no recovery is sought. The complaint also seeks an order directing Align to reform and improve its corporate governance and internal procedures, and seeks restitution in an unspecified amount, costs, and attorneys’ fees. On July 8, 2013, an Order was entered staying this derivative lawsuit until an initial ruling on our first motion to dismiss the Securities Action. On January 15, 2014, an Order was entered staying this derivative lawsuit until an initial ruling on our second motion to dismiss the Securities Action. On October 14, 2014, an Order was entered staying this derivative lawsuit until a ruling by the Ninth Circuit in the Securities Action discussed above. Align is currently unable to predict the outcome of this complaint and therefore cannot determine the likelihood of loss nor estimate a range of possible losses. In addition, in the course of Align's operations, Align is involved in a variety of claims, suits, investigations, and proceedings, including actions with respect to intellectual property claims, patent infringement claims, government investigations, labor and employment claims, breach of contract claims, tax, and other matters. Regardless of the outcome, these proceedings can have an adverse impact on us because of defense costs, diversion of management resources, and other factors. Although the results of complex legal proceedings are difficult to predict and Align's view of these matters may change in the future as litigation and events related thereto unfold; Align currently does not believe that these matters, individually or in the aggregate, will materially affect Align's financial position, results of operations or cash flows.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Commitments and Contingencies

Operating Leases

As of March 31, 2016, minimum future lease payments for non-cancelable operating leases are as follows (in thousands):



Fiscal Year Ending December 31,	Operating leases
Remainder of 2016	$	8,375
2017	7,126
2018	2,808
2019	655
2020	335
Thereafter	111
Total minimum future lease payments	$	19,410

Off-balance Sheet Arrangements

As of March 31, 2016, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

Indemnification Provisions

In the normal course of business to facilitate transactions in our services and products, we indemnify certain parties: customers, vendors, lessors and other parties with respect to certain matters, including, but not limited to, services to be provided by us and intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and our executive officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period. As of March 31, 2016, we did not have any material indemnification claims that were probable or reasonably possible.

Stock-based Compensation

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Stock-based Compensation

Summary of stock-based compensation expense

As of March 31, 2016, the 2005 Incentive Plan (as amended) has a total reserve of 23,283,379 shares of which 3,617,914 shares are available for issuance.

Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and may be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation related to all of our stock-based awards and employee stock purchases for the three months ended March 31, 2016 and 2015 is as follows (in thousands):



	Three Months Ended March 31,
	2016		2015
Cost of net revenues	$	961	$	978
Selling, general and administrative	9,834		8,771
Research and development	1,729		1,899
Total stock-based compensation	$	12,524	$	11,648

Options

Activity for the three months ended March 31, 2016 under the stock option plans is set forth below (in thousands, except years and per share amounts):



	Stock Options Number of Shares Underlying Stock Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years )
Outstanding as of December 31, 2015	496		$	15.14
Granted	—		—
Exercised	(30	)	11.69
Cancelled or expired	—		—
Outstanding as of March 31, 2016	466		$	15.37	1.84	$	26,699
Vested and expected to vest at March 31, 2016	466		$	15.37	1.84	$	26,699
Exercisable at March 31, 2016	466		$	15.37	1.84	$	26,699

There were no stock options granted during the three months ended March 31, 2016 and 2015. All compensation costs relating to stock options have been recognized as of March 31, 2016.

Restricted Stock Units (“RSU”)

A summary of the RSU activity for the three months ended March 31, 2016 is as follows (in thousands, except years):



	Number of Shares Underlying RSU		Weighted Average Grant Date Fair Value		Weighted Remaining Contractual Period	Aggregate Intrinsic Value
					(in years)
Nonvested as of December 31, 2015	2,079		$	49.45
Granted	558		63.75
Vested and released	(646	)	44.27
Forfeited	(61	)	50.48
Nonvested as of March 31, 2016	1,930		$	55.29	1.67	$	140,321

As of March 31, 2016, the total unamortized compensation cost related to RSU, net of estimated forfeitures, was $88.7 million, which we expect to recognize over a weighted average period of 2.5 years.

We have granted market-performance based restricted stock units (“MSU”) to our executive officers. Each MSU represents the right to one share of Align’s common stock and will be issued through our amended 2005 Incentive Plan. The actual number of MSU which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of the NASDAQ Composite Index over the vesting period, generally two to three years, up to 150% of the MSU initially granted.

The following table summarizes the MSU activity for the three months ended March 31, 2016 (in thousands, except years):



	Number of Shares Underlying MSU		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Period	Aggregate Intrinsic Value
					(in years )
Nonvested as of December 31, 2015	611		$	51.41
Granted	215		55.79
Vested and released	(253	)	35.49
Forfeited	(25	)	53.70
Nonvested as of March 31, 2016	548		$	60.35	1.84	$	39,852

As of March 31, 2016, the total unamortized compensation costs related to the MSU, net of estimated forfeitures, was $18.9 million, which we expect to recognize over a weighted average period of 1.8 years.

Employee Stock Purchase Plan ("ESPP")

In May 2010, our stockholders approved the 2010 Employee Stock Purchase Plan ("2010 Purchase Plan") which will continue until terminated by either the Board of Directors or its administrator. The maximum number of shares available for purchase under the 2010 Purchase Plan is 2,400,000 shares. As of March 31, 2016, 1,029,526 shares remain available for purchase under the 2010 Purchase Plan.

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:



	Three Months Ended March 31,
	2016			2015
Expected term (in years)	1.3			1.2
Expected volatility	33.7		%	31.9		%
Risk-free interest rate	0.77		%	0.26		%
Expected dividends	—			—
Weighted average fair value at grant date	$	19.96		$	15.98

As of March 31, 2016, the total unamortized compensation cost related to employee purchases was $1.7 million, which we expect to recognize over a weighted average period of 0.6 year.

- 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 + Details

Common Stock Repurchase Program	3 Months Ended
Common Stock Repurchase Program	Mar. 31, 2016
Notes To Financial Statements [Abstract]
Common Stock Repurchase	Common Stock Repurchase In April 2014, we announced that our Board of Directors had authorized a stock repurchase program ("April 2014") pursuant to which we may purchase up to $300.0 million of our common stock over the next three years. As of March 31, 2016, we have approximately $100.0 million remaining under the April 2014 stock repurchase program. On May 3, 2016, as part of our $300.0 million April 2014 stock repurchase program, we entered into an ASR to repurchase $50.0 million of our common stock (the "2016 ASR"). Under the terms of the 2016 ASR, we paid $50.0 million on May 4, 2016 and received an initial delivery of approximately 0.5 million shares based on current market prices. The final number of shares to be repurchased will be based on our volume-weighted average stock price during the term of the 2016 ASR, less an agreed upon discount. Commencing immediately after the completion of the 2016 ASR, we will repurchase $50.0 million of our common stock on the open market. These two actions will complete the April 2014 stock repurchase program. On April 28, 2016, we announced that our Board of Directors had authorized a plan to repurchase up to $300.0 million of the Company's stock. This latest authorization is in addition to the existing $300 million authorization announced in April 2014, which brings the total authorization to $600 million. Any purchases under this stock repurchase program may be made, from time-to-time, pursuant to open market purchases (including pursuant to Rule 10b5-1 plans), privately-negotiated transactions, accelerated stock repurchases, block trades or derivative contracts or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934.

Accounting for Income Taxes

3 Months Ended

Mar. 31, 2016

Accounting for Income Taxes

Our provision for income taxes was $12.4 million and $11.3 million for the three months ended March 31, 2016 and 2015, respectively. This represents effective tax rates of 23.4% and 23.8%, respectively. Our effective tax rates differ from the statutory federal income tax rate of 35% due to certain foreign earnings, primarily from Costa Rica, which are subject to a lower tax rate, state income tax expense, the tax impact of certain stock-based compensation charges and unrecognized tax benefits.

We exercise significant judgment in regards to estimates of future market growth, forecasted earnings and projected taxable income in determining the provision for income taxes, and for purposes of assessing our ability to utilize any future benefit from deferred tax assets.

As of March 31, 2016, we maintained a valuation allowance of $31.7 million against our deferred tax assets which primarily relate to Israel operating loss carryforwards and Australia capital loss carryforwards. These net operating and capital loss carryforwards would result in us recording an income tax benefit if we were to conclude it is more likely than not that the related deferred tax assets will be realized.

Our total gross unrecognized tax benefits, excluding interest, was $40.9 million and $39.4 million as of March 31, 2016 and December 31, 2015, respectively, all of which would impact our effective tax rate if recognized. We have elected to recognize interest and penalties related to unrecognized tax benefits as a component of income taxes. The interest accrued as of March 31, 2016 is $0.9 million. We do not expect any significant changes to the amount of unrecognized tax benefit within the next twelve months.

We file U.S. federal, U.S. state, and non-U.S. income tax returns. Our major tax jurisdictions are U.S. federal and the State of California. For U.S. federal and state tax returns, we are no longer subject to tax examinations for years before 2000. With few exceptions, we are no longer subject to examination by foreign tax authorities for years before 2007. Our subsidiary in Israel is under audit by the local tax authorities for calendar years 2006 through 2013. We are currently under audit by the California Franchise Tax Board for fiscal years 2011, 2012 and 2013.

In June 2009, the Costa Rica Ministry of Foreign Trade, an agency of the Government of Costa Rica, granted a twelve year extension of certain income tax incentives, which were previously granted in 2002. The incentive tax rates will expire in various years beginning in 2017. Under these incentives, all of the income in Costa Rica during these twelve year incentive periods is subject to reduced rate of Costa Rica income tax. In order to receive the benefit of these incentives, we must hire specified numbers of employees and maintain certain minimum levels of fixed asset investment in Costa Rica. If we do not fulfill these conditions for any reason, our incentive could lapse, and our income in Costa Rica would be subject to taxation at higher rates, which could have a negative impact on our operating results. The Costa Rica corporate income tax rate that would apply, absent the incentives, is 30% for 2016 and 2015. Income taxes were reduced by $8.6 million and $8.2 million for the three months ended March 31, 2016 and 2015, respectively, representing a benefit to diluted net income per share of $0.11 and $0.10 in 2016 and 2015, respectively.

Net Profit Per Share

3 Months Ended

Mar. 31, 2016

Net Profit Per Share

Net Income Per Share

Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed using the weighted average number of shares of common stock, adjusted for any dilutive effect of potential common stock. Potential common stock, computed using the treasury stock method, includes RSU, MSU, stock options and ESPP.

The following table sets forth the computation of basic and diluted net income per share attributable to common stock (in thousands, except per share amounts):



	Three Months Ended, March 31,
	2016		2015
Numerator:
Net income	$	40,546	$	36,177
Denominator:
Weighted-average common shares outstanding, basic	79,831		80,459
Dilutive effect of potential common stock	1,489		1,365
Total shares, diluted	81,320		81,824

Net income per share, basic	$	0.51	$	0.45
Net income per share, diluted	$	0.50	$	0.44

For the three months ended March 31, 2016 and 2015, the anti-dilutive effect from RSU, MSU and ESPP was not material.

Segments and Geographical Information

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

Segments and Geographical Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. We report segment information based on the management approach. The management approach designates the internal reporting used by the CODM for decision making and performance assessment as the basis for determining our reportable segments. The performance measures of our reportable segments include net revenues and gross profit.

We have grouped our operations into two reportable segments which are also our reporting units: Clear Aligner segment and Scanner segment.


•	Our Clear Aligner segment consists of our Invisalign system which includes Invisalign Full, Express/Lite, Teen, Assist, Vivera retainers, along with our training and ancillary products for treating malocclusion.


•	Our Scanner segment consists of intra-oral scanning systems and additional services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. This segment includes our iTero scanner and OrthoCAD services.

These reportable operating segments are based on how our CODM views and evaluates our operations as well as allocation of resources. The following information relates to these segments (in thousands):



	For the Three Months Ended March 31,
Net Revenues	2016		2015
Clear Aligner	$	219,698	$	187,029
Scanner	19,022		11,057
Total net revenues	$	238,720	$	198,086

Gross profit
Clear Aligner	$	172,067	$	147,960
Scanner	8,560		3,130
Total gross profit	$	180,627	$	151,090

Geographical Information

Net revenues are presented below by geographic area (in thousands):



	For the Three Months Ended March 31,
	2016		2015
Net revenues: ⁽¹⁾
U.S.	$	166,101	$	139,704
the Netherlands	47,400		38,645
Other international	25,219		19,737
Total net revenues	$	238,720	$	198,086

⁽¹⁾Net revenues are attributed to countries based on location of where revenue is recognized.

Tangible long-lived assets are presented below by geographic area (in thousands):



	March 31, 2016		December 31, 2015
Long-lived assets:⁽²⁾
United States	$	122,113	$	112,632
Mexico	15,971		15,422
Other International	9,945		8,419
Total long-lived assets	$	148,029	$	136,473

⁽²⁾Long-lived assets are attributed to countries based on entity that owns the asset.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2016
Notes To Financial Statements [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, or “Align”) in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and contain all adjustments, including normal recurring adjustments, necessary to present fairly our results of operations for the three months ended March 31, 2016 and 2015, our comprehensive income for the three months ended March 31, 2016 and 2015, our financial position as of March 31, 2016 and our cash flows for the three months ended March 31, 2016 and 2015. The Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from the December 31, 2015 audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or any other future period, and we make no representations related thereto. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2015.
Use of estimates	Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America (“U.S.”) requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the fair values of financial instruments, long-lived assets and goodwill, useful lives of intangible assets and property and equipment, revenue recognition, stock-based compensation, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (" FASB") released Accounting Standards Update ("ASU") 2014-9 "Revenue from Contracts with Customers" to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the update by one year, with early adoption on the original effective date permitted. We are required to adopt this standard starting in the first quarter of fiscal year 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (ii) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. We have not yet selected a transition method, and are in the process of determining the impact that the new standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (topic 842). The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. This ASU will become effective for the Company on January 1, 2017. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.