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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2019
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and six months ended June 30, 2019 and 2018 was as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Cost of sales | $ | 3.9 |  |  | $ | 2.8 |  |  | $ | 7.9 |  |  | $ | 5.8 |
Selling, general, and administrative expenses | 14.3 |  |  | 12.7 |  |  | 27.0 |  |  | 24.5 |
Research and development expenses | 4.1 |  |  | 3.7 |  |  | 8.2 |  |  | 7.3 |
Total stock-based compensation expense | $ | 22.3 |  |  | $ | 19.2 |  |  | $ | 43.1 |  |  | $ | 37.6 |
At June 30, 2019, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $158.3 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 32 months. During the six months ended June 30, 2019, the Company granted 0.7 million stock options at a weighted-average exercise price of $177.71 and 0.2 million shares of restricted stock units at a weighted-average grant-date fair value of $177.38. The Company also granted 33 thousand shares of market-based restricted stock units at a weighted-average grant-date fair value of $193.95. The market-based restricted stock units vest based on a combination of certain service and market conditions. The actual number of shares issued will be determined based on the Company's total shareholder return relative to a selected industry peer group over a three-year performance period, and may range from 0% to 175% of the targeted number of shares granted. Fair Value Disclosures The fair value of the market-based restricted stock units was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. The weighted- average assumptions used to determine the fair value of the market-based restricted stock units granted during the six months ended June 30, 2019 and 2018 included a risk-free interest rate of 2.2% and 2.7%, respectively, and an expected volatility rate of 29.4% and 29.7%, respectively. The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
Option Awards | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Average risk-free interest rate | 2.3 | % |  | 2.9 | % |  | 2.3 | % |  | 2.9 | %
Expected dividend yield | None |  |  | None |  |  | None |  |  | None |
Expected volatility | 29.7 | % |  | 29.0 | % |  | 29.6 | % |  | 29.1 | %
Expected term (years) | 5.0 |  |  | 5.0 |  |  | 5.0 |  |  | 5.0 |
Fair value, per option | $ | 54.03 |  |  | $ | 42.12 |  |  | $ | 54.03 |  |  | $ | 42.14 |
The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
ESPP | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Average risk-free interest rate | 2.4 | % |  | 1.9 | % |  | 2.4 | % |  | 1.6 | %
Expected dividend yield | None |  |  | None |  |  | None |  |  | None |
Expected volatility | 31.9 | % |  | 32.8 | % |  | 32.5 | % |  | 32.6 | %
Expected term (years) | 0.6 |  |  | 0.6 |  |  | 0.6 |  |  | 0.6 |
Fair value, per share | $ | 46.73 |  |  | $ | 36.94 |  |  | $ | 48.43 |  |  | $ | 35.49 |

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- 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
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