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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2021
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, 2021 and 2020 was as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Cost of sales | $ | 5.7 |  |  | $ | 4.7 |  |  | $ | 11.2 |  |  | $ | 9.3 |
Selling, general, and administrative expenses | 18.3 |  |  | 15.3 |  |  | 34.8 |  |  | 29.7 |
Research and development expenses | 6.3 |  |  | 4.8 |  |  | 12.5 |  |  | 9.7 |
Total stock-based compensation expense | 30.3 |  |  | 24.8 |  |  | 58.5 |  |  | 48.7 |
Income tax benefit | (4.9) |  |  | (4.1) |  |  | (8.8) |  |  | (7.6) |
Total stock-based compensation expense, net of tax | $ | 25.4 |  |  | $ | 20.7 |  |  | $ | 49.7 |  |  | $ | 41.1 |
At June 30, 2021, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $200.7 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 33 months. During the six months ended June 30, 2021, the Company granted 1.5 million stock options at a weighted-average exercise price of $85.24, and 0.6 million restricted stock units at a weighted-average grant-date fair value of $92.77. During the six months ended June 30, 2021, the Company also granted 0.1 million market-based restricted stock units at a weighted-average grant-date fair value of $120.56 and issued an additional 0.1 million shares of common stock related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of the targeted shares. 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, 2021 and 2020 included a risk-free interest rate of 0.4% and 0.2%, respectively, and an expected volatility rate of 34.4% and 32.7%, 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,
| 2021 |  | 2020 |  | 2021 |  | 2020
Average risk-free interest rate | 0.8 | % |  | 0.3 | % |  | 0.8 | % |  | 0.3 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 33.5 | % |  | 33.5 | % |  | 33.5 | % |  | 33.4 | %
Expected term (years) | 5.0 |  | 5.0 |  | 5.0 |  | 5.0
Fair value, per option | $ | 28.60 |  |  | $ | 21.58 |  |  | $ | 28.54 |  |  | $ | 21.61 |
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,
| 2021 |  | 2020 |  | 2021 |  | 2020
Average risk-free interest rate | 0.0 | % |  | 0.1 | % |  | 0.1 | % |  | 1.4 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 32.3 | % |  | 37.5 | % |  | 36.8 | % |  | 32.6 | %
Expected term (years) | 0.6 |  | 0.6 |  | 0.6 |  | 0.6
Fair value, per share | $ | 26.03 |  |  | $ | 18.42 |  |  | $ | 22.65 |  |  | $ | 16.06 |

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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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