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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of RSU Activity

A summary of RSUs activity under all stock plans for the three months ended March 31, 2023, is presented as follows (in millions, except per share amounts):

			Shares						Weighted-Average Grant-Date Fair Value
Unvested balance as of December 31, 2022			4.6						$	241.47
RSUs granted			2.2						$	230.07
RSUs vested			(1.5)						$	223.07
RSUs forfeited			—						$	250.75
Unvested balance as of March 31, 2023			5.3						$	241.84

Summary of Stock Option Activity Under All Stock Plans

A summary of stock option activity under all stock plans for the three months ended March 31, 2023, is presented as follows (in millions, except per share amounts):

						Stock Options Outstanding
						Number Outstanding						Weighted-Average Exercise Price Per Share
Balance as of December 31, 2022						10.8						$	144.86
Options granted						0.7						$	229.86
Options exercised						(0.6)						$	73.91
Options forfeited/expired						—						$	264.19
Balance as of March 31, 2023						10.9						$	153.45

Share-Based Payment Arrangement, Performance Shares, Activity

PSU activity for the three months ended March 31, 2023, was as follows (in millions, except per share amounts):

						Shares						Weighted-Average Grant Date Fair Value Per Share
Unvested balance as of December 31, 2022						0.1						$	299.32
Granted						0.1						$	235.84
Vested						—						$	—
Performance change						—						$	—
Forfeited						—						$	—
Unvested balance as of March 31, 2023						0.2						$	256.44

Summary of Share-Based Compensation Expense

The following table summarizes share-based compensation expense for the three months ended March 31, 2023, and 2022 (in millions):

			Three Months Ended March 31,
			2023						2022
Cost of sales – products (before capitalization)			$	23.0					$	18.7
Amounts capitalized into inventory (1)			(18.8)						—
Amounts recognized in income for amounts previously capitalized in inventory			12.6						—
Cost of sales – products			$	16.8					$	18.7
Cost of sales – services			7.0						5.6
Total cost of sales			23.8						24.3
Selling, general, and administrative			66.7						60.3
Research and development			50.1						36.8
Share-based compensation expense before income taxes			140.6						121.4
Income tax benefit			28.0						27.2
Share-based compensation expense after income taxes			$	112.6					$	94.2
(1) Share-based compensation expense subject to capitalization into inventory was not material during the quarter ended March 31, 2022, and, therefore, not recorded. The Company commenced capitalization of share-based compensation expense into inventory during the quarter ended December 31, 2022, on a prospective basis.

Schedule of Estimated Fair Value of the Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions

The weighted-average estimated fair values of stock options and the rights to acquire stock under the ESPP, as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock under the ESPP that were granted during the three months ended March 31, 2023, and 2022, were as follows:

			Three Months Ended March 31,
			2023						2022
Stock Options
Risk-free interest rate			4.8%						1.6%
Expected term (in years)			3.4						3.5
Expected volatility			34%						35%
Fair value at grant date			$72.13						$80.80
ESPP
Risk-free interest rate			4.7%						0.8%
Expected term (in years)			1.2						1.2
Expected volatility			35%						37%
Fair value at grant date			$79.33						$88.85

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Tabular disclosure of cost recognized for award under share-based payment arrangement by plan. Includes, but is not limited to, related tax benefit.

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Tabular disclosure of the number and weighted-average grant date fair value for restricted stock units that were outstanding at the beginning and end of the year, and the number of restricted stock units that were granted, vested, or forfeited during the year.

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Tabular disclosure for stock option plans. Includes, but is not limited to, outstanding awards at beginning and end of year, grants, exercises, forfeitures, and weighted-average grant date fair value.

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