XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.19.3

SHARE-BASED COMPENSATION | 9 Months Ended
--- | ---
Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION In April 2019, the Company's shareholders approved an amended and restated 2010 Incentive Award Plan to provide for an increase in the number of shares of common stock reserved for issuance thereunder from 24,450,000 to 28,450,000. As of September 30, 2019, approximately 6.2 million shares of common stock were reserved for future issuance under the Company’s stock plans. A maximum of approximately 2.7 million of these shares can be awarded as restricted stock units (“RSUs”). Stock Option Information A summary of stock option activity under all stock plans for the nine months ended September 30, 2019, is presented as follows (in millions, except per share amounts):
|  | Stock Options Outstanding |  |
|  | Number Outstanding |  | Weighted Average Exercise Price Per Share
Balance at December 31, 2018 |  | 6.2 |  |  | $ | 200.79 |
Granted |  | 0.6 |  |  | $ | 521.46 |
Exercised |  | (1.0) |  |  | $ | 154.71 |
Forfeited/expired |  | (0.1) |  |  | $ | 344.13 |
Balance at September 30, 2019 |  | 5.7 |  |  | $ | 239.91 |
As of September 30, 2019, options to purchase an aggregate of $4.5 million shares of common stock were exercisable at a weighted average price of $188.20 per share. Restricted Stock Units Information A summary of RSUs activity for the nine months ended September 30, 2019, is presented as follows (in millions, except per share amounts):
| Shares |  | Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2018 | 2.0 |  |  | $ | 295.70 |
Granted | 0.8 |  |  | $ | 541.18 |
Vested | (0.8) |  |  | $ | 255.09 |
Forfeited | (0.1) |  |  | $ | 368.66 |
Unvested balance at September 30, 2019 | 1.9 |  |  | $ | 405.39 |
Employee Stock Purchase Plan Under the Employee Stock Purchase Plan (“ESPP”), employees purchased approximately 0.2 million shares for $56.4 million and approximately 0.2 million shares for $46.8 million during the nine months ended September 30, 2019, and 2018, respectively. Share-based Compensation Expense The following table summarizes share-based compensation expense for the three and nine months ended September 30, 2019, and 2018 (in millions):
| Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
| 2019 |  | 2018 |  | 2019 |  | 2018
Cost of sales - products | $ | 12.4 |  |  | $ | 10.1 |  |  | $ | 34.8 |  |  | $ | 27.2 |
Cost of sales - services | 5.6 |  |  | 4.5 |  |  | 14.9 |  |  | 12.5 |
Total cost of sales | 18.0 |  |  | 14.6 |  |  | 49.7 |  |  | 39.7 |
Selling, general and administrative | 44.7 |  |  | 35.9 |  |  | 124.0 |  |  | 98.1 |
Research and development | 26.6 |  |  | 20.2 |  |  | 74.5 |  |  | 54.4 |
Share-based compensation expense before income taxes | 89.3 |  |  | 70.7 |  |  | 248.2 |  |  | 192.2 |
Income tax benefit | 18.1 |  |  | 14.9 |  |  | 51.0 |  |  | 40.0 |
Share-based compensation expense after income taxes | $ | 71.2 |  |  | $ | 55.8 |  |  | $ | 197.2 |  |  | $ | 152.2 |
The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s stock plans and rights to acquire stock granted under the ESPP. The weighted-average estimated fair values of stock options and rights to acquire stock under the ESPP, as well as the weighted-average assumptions used in calculating those fair values, were as follows:
| Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
| 2019 |  | 2018 |  | 2019 |  | 2018
Stock Options |  |  |  |  |  |  |
Risk-free interest rate | 1.5% |  |  | 2.7% |  |  | 2.0% |  |  | 2.7% |
Expected term (in years) | 3.9 |  | 4.3 |  | 4.1 |  | 4.3
Expected volatility | 30% |  |  | 32% |  |  | 30% |  |  | 33% |
Fair value at grant date | $127.19 |  |  | $159.67 |  |  | $142.22 |  |  | $145.15 |
ESPP |  |  |  |  |  |  |
Risk-free interest rate | 1.9% |  |  | 2.5% |  |  | 2.1% |  |  | 2.1% |
Expected term (in years) | 1.2 |  | 1.3 |  | 1.2 |  | 1.3
Expected volatility | 29% |  |  | 31% |  |  | 29% |  |  | 32% |
Fair value at grant date | $146.48 |  |  | $153.72 |  |  | $148.99 |  |  | $135.84 |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + 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