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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 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 nine months ended September 30, 2022 and 2021 was as follows (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Cost of sales | $ | 5.3 |  |  | $ | 4.9 |  |  | $ | 18.4 |  |  | $ | 16.1 |
Selling, general, and administrative expenses | 18.1 |  |  | 15.9 |  |  | 57.9 |  |  | 50.7 |
Research and development expenses | 6.9 |  |  | 5.8 |  |  | 22.6 |  |  | 18.3 |
Total stock-based compensation expense | 30.3 |  |  | 26.6 |  |  | 98.9 |  |  | 85.1 |
Income tax benefit | (4.9) |  |  | (4.7) |  |  | (15.2) |  |  | (13.5) |
Total stock-based compensation expense, net of tax | $ | 25.4 |  |  | $ | 21.9 |  |  | $ | 83.7 |  |  | $ | 71.6 |
At September 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 $220.3 million, which will be amortized on a straight-line basis over each award's requisite service period. The weighted-average remaining requisite service period is 32 months. During the nine months ended September 30, 2022, the Company granted 1.6 million stock options at a weighted-average exercise price per share of $105.18, and 0.7 million restricted stock units at a weighted-average grant-date fair value per share of $104.41. During the nine months ended September 30, 2022, the Company also granted 0.1 million market-based restricted stock units at a weighted-average grant-date fair value per share of $124.92 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 nine months ended September 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 nine months ended September 30, 2022 and 2021 included an average risk-free interest rate of 2.9% and 0.4%, respectively, and an expected volatility rate of 33.9% 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 September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Risk-free interest rate | 3.2 | % |  | 0.9 | % |  | 3.0 | % |  | 0.8 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 31.5 | % |  | 33.5 | % |  | 31.5 | % |  | 33.5 | %
Expected term (years) | 4.9 |  | 5.3 |  | 5.0 |  | 5.0
Fair value, per option | $ | 32.00 |  |  | $ | 34.38 |  |  | $ | 34.77 |  |  | $ | 28.78 |
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,
| 2022 |  | 2021 |  | 2022 |  | 2021
Risk-free interest rate | 2.5 | % |  | 0.1 | % |  | 0.5 | % |  | 0.1 | %
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 31.1 | % |  | 33.7 | % |  | 32.0 | % |  | 36.6 | %
Expected term (years) | 0.8 |  | 0.7 |  | 0.6 |  | 0.6
Fair value, per share | $ | 21.53 |  |  | $ | 29.85 |  |  | $ | 28.18 |  |  | $ | 23.07 |

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