STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

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