STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

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, 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