STOCK-BASED COMPENSATION

9 Months Ended

Sep. 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 nine months ended September 30, 2021 and 2020 was as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of sales	$	4.9	$	4.3	$	16.1	$	13.6
Selling, general, and administrative expenses	15.9		13.8		50.7		43.5
Research and development expenses	5.8		4.9		18.3		14.6
Total stock-based compensation expense	26.6		23.0		85.1		71.7
Income tax benefit	(4.7)		(3.9)		(13.5)		(11.5)
Total stock-based compensation expense, net of tax	$	21.9	$	19.1	$	71.6	$	60.2

At September 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 $184.4 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 32 months.

During the nine months ended September 30, 2021, the Company granted 1.6 million stock options at a weighted-average exercise price of $93.74, and 0.6 million restricted stock units at a weighted-average grant-date fair value of $94.85. During the nine months ended September 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 nine months ended September 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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Average risk-free interest rate	0.9		%	0.3		%	0.8		%	0.3		%
Expected dividend yield	None			None			None			None
Expected volatility	33.5		%	33.4		%	33.5		%	34.2		%
Expected term (years)	5.3			5.2			5.0			5.1
Fair value, per option	$	34.38		$	22.24		$	28.78		$	22.19

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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Average risk-free interest rate	0.1		%	0.1		%	0.1		%	1.3		%
Expected dividend yield	None			None			None			None
Expected volatility	33.7		%	37.5		%	36.6		%	33.1		%
Expected term (years)	0.7			0.7			0.6			0.6
Fair value, per share	$	29.85		$	21.79		$	23.07		$	16.61