Share-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

We have a stockholder-approved stock incentive plan, the 2008 Stock Incentive Plan (Amended and Restated as of April 15, 2015, as amended effective June 15, 2016) (Plan) that provides for the granting of options, restricted stock units (RSUs), performance stock units (PSUs) and other share-based awards to our employees, officers and non-employee directors. The Management Compensation and Development Committee of the Board of Directors (Compensation Committee) may determine the type, amount and terms, including vesting, of any awards made under the Plan.

On June 15, 2016, our stockholders approved an amendment of the Plan, which included the following key modifications: adoption of an aggregate share reserve of 265,263,282 shares of Common Stock, which includes 17,500,000 new shares of Common Stock; a limitation on the aggregate equity compensation that may be provided to non-employee members of the Board of Directors; and an amendment that includes clarifying changes to employee award provisions regarding vesting acceleration on a change in control or certain employment terminations events and the applicability of the five percent limitation on such awards. The term of the plan is through April 15, 2025.

The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Income for the three- and six-month periods ended June 30, 2016 and 2015:



	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
	2016		2015		2016		2015
Cost of goods sold (excluding amortization of acquired intangible assets)	$	8.7	$	8.1	$	17.7	$	14.8
Research and development	63.9		63.6		126.1		119.8
Selling, general and administrative	84.9		76.0		160.2		141.9
Total share-based compensation expense	157.5		147.7		304.0		276.5
Tax benefit related to share-based compensation expense	44.0		44.8		84.1		81.2
Reduction in income	$	113.5	$	102.9	$	219.9	$	195.3

The following table summarizes the activity for stock options, RSUs and PSUs for the six-month period ended June 30, 2016 (in millions unless otherwise noted):



	Stock Options		Restricted Stock Units		Performance- Based Restricted Stock Units (in thousands)
Outstanding at December 31, 2015	75.7		7.7		334
Changes during the Year:
Granted	5.6		1.3		203
Exercised / Released	(3.7	)	(2.5	)	(72	)
Forfeited	(1.2	)	(0.2	)	(22	)
Outstanding at June 30, 2016	76.4		6.3		443

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at June 30, 2016 were as follows (dollars in millions):



	Stock Options		Restricted Stock Units		Performance- Based Restricted Stock Units
Unrecognized compensation cost	$	607.1	$	338.3	$	31.3
Expected weighted-average period in years of compensation cost to be recognized	2.0		1.6		1.9

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details