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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2022
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, 2022 and 2021 was as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Cost of sales | $ | 6.9 |  |  | $ | 5.7 |  |  | $ | 13.1 |  |  | $ | 11.2 |
Selling, general, and administrative expenses | 21.1 |  |  | 18.3 |  |  | 39.8 |  |  | 34.8 |
Research and development expenses | 8.2 |  |  | 6.3 |  |  | 15.7 |  |  | 12.5 |
Total stock-based compensation expense | 36.2 |  |  | 30.3 |  |  | 68.6 |  |  | 58.5 |
Income tax benefit | (5.9) |  |  | (4.9) |  |  | (10.3) |  |  | (8.8) |
Total stock-based compensation expense, net of tax | $ | 30.3 |  |  | $ | 25.4 |  |  | $ | 58.3 |  |  | $ | 49.7 |
At June 30, 2022, 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 $233.8 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, 2022, the Company granted 1.4 million stock options at a weighted-average exercise price of $106.14, and 0.6 million restricted stock units at a weighted-average grant-date fair value of $106.12. During the six months ended June 30, 2022, the Company also granted 0.1 million market-based restricted stock units at a weighted-average grant-date fair value of $125.50 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 granted during the six months ended June 30, 2022 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 175.0% of the targeted number of shares granted. Fair Value Disclosures The weighted-average assumptions used in a Monte Carlo simulation model to determine the fair value of the market-based restricted stock units granted during the six months ended June 30, 2022 and 2021 included a risk-free interest rate of 2.8% and 0.4%, respectively, and an expected volatility rate of 33.8% and 34.4%, 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,
| 2022 |  | 2021 |  | 2022 |  | 2021
Average risk-free interest rate | 3.0 | % |  | 0.8 | % |  | 3.0 | % |  | 0.8 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 31.4 | % |  | 33.5 | % |  | 31.4 | % |  | 33.5 | %
Expected term (years) | 5.0 |  | 5.0 |  | 5.0 |  | 5.0
Fair value, per option | $ | 35.07 |  |  | $ | 28.60 |  |  | $ | 35.08 |  |  | $ | 28.54 |
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,
| 2022 |  | 2021 |  | 2022 |  | 2021
Average risk-free interest rate | 1.1 | % |  | 0.0 | % |  | 0.3 | % |  | 0.1 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 31.5 | % |  | 32.3 | % |  | 32.1 | % |  | 36.8 | %
Expected term (years) | 0.6 |  | 0.6 |  | 0.6 |  | 0.6
Fair value, per share | $ | 23.63 |  |  | $ | 26.03 |  |  | $ | 28.63 |  |  | $ | 22.65 |

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