EQUITY

12 Months Ended

Dec. 31, 2019

At December 31, 2019, the Company had authorization to purchase $1.0 billion shares of common stock under the share repurchase program and has $489.8 million remaining under this program. Share repurchases will be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchase transactions and other structured share repurchases, privately negotiated transactions or other transactions in such amounts and at such times as the Company deems appropriate based upon prevailing market and business conditions and other factors. For the years ended December 31, 2019, 2018 and 2017, the Company repurchased outstanding shares of common stock at a cost of $260.0 million, $250.2 million and $400.3 million, respectively.

For the years ended December 31, 2019, 2018 and 2017, the Company received proceeds of $108.9 million, $28.0 million and $82.3 million, respectively, primarily as a result of stock options exercised in the amount of 2.7 million, 1.0 million and 2.3 million in each of the years, respectively. It is the Company’s practice to issue shares from treasury stock when options are exercised.

Total outstanding shares of common stock and treasury stock were as follows:


(in millions)	Shares of Common Stock	Shares of Treasury Stock	Outstanding Shares

Balance at December 31, 2016	264.5	(34.4)	230.1

Shares of treasury stock issued	—	2.9	2.9
Repurchase of common stock at an average cost of $64.40	—	(6.2)	(6.2)

Balance at December 31, 2017	264.5	(37.7)	226.8

Shares of treasury stock issued	—	1.6	1.6
Repurchase of common stock at an average cost of $45.92	—	(5.4)	(5.4)

Balance at December 31, 2018	264.5	(41.5)	223.0
Shares of treasury stock issued	—	3.1	3.1
Repurchase of common stock at an average cost of $54.18	—	(4.8)	(4.8)
Balance at December 31, 2019	264.5	(43.2)	221.3

The Company maintains the 2016 Omnibus Incentive Plan (the “Plan”) under which it may grant non-qualified stock options (“NQSOs”), incentive stock options, restricted stock, RSUs and stock appreciation rights, collectively referred to as “Awards.” Awards are granted at exercise prices that are equal to the closing stock price on the date of grant. The Company authorized grants under the Plan of 25.0 million shares of common stock, plus any unexercised portion of canceled or terminated stock options granted under the legacy DENTSPLY International Inc. 2010 and 2002 Equity Incentive Plans, as amended, and under the legacy Sirona Dental Systems, Inc. 2015 and 2006 Equity Incentive Plans, as amended. For each restricted stock and RSU issued, it is counted as a reduction of 3.09 shares of common stock available to be issued under the Plan. No key employee may be granted awards in excess of 1.0 million shares of common stock in any calendar year. The number of shares available for grant under the 2016 Plan at December 31, 2019 is 27.0 million.

Total stock based compensation expense and the tax related benefit were as follows:


	Year End December 31,
(in millions)	2019		2018		2017

Stock option expense	$	7.1	$	6.6	$	15.4
RSU expense	57.8		13.2		31.2
Total stock based compensation expense	$	64.9	$	19.8	$	46.6

Related deferred income tax benefit	$	8.4	$	2.4	$	8.4

For the years ended December 31, 2019, 2018, and 2017, stock compensation expense of $64.9 million, $19.8 million and $46.6 million, respectively, was recorded in the Consolidated Statements of Operations. For the years ended December 31, 2019, 2018, and 2017, $63.0 million, $18.0 million and $45.7 million, respectively, was recorded in Selling, general and administrative expense and $1.9 million, $0.7 million and $0.7 million, respectively, was recorded in Cost of products sold. For the years ended December 31, 2018 and 2017, the Company recorded $1.1 million and $0.2 million, respectively, in Restructuring and other costs in the Consolidated Statements of Operations. For the years ended December 31, 2019 and 2018, the Company lowered the likely payout level on certain performance-based grants.

There were 1.1 million non-qualified stock options unvested at December 31, 2019. The remaining unamortized compensation cost related to non-qualified stock options is $7.9 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.9 years. The unamortized compensation cost related to RSUs is $58.0 million, which will be expensed over the remaining weighted average restricted period of the RSUs, or 3.0 years.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of each option awarded. The average assumptions used to determine compensation cost for the Company’s NQSOs issued were as follows:


	Year End December 31,
	2019			2018			2017

Weighted average fair value per share	$	12.20		$	12.38		$	13.83
Expected dividend yield	0.71		%	0.64		%	0.57		%
Risk-free interest rate	2.36		%	2.72		%	2.11		%
Expected volatility	22.6		%	19.7		%	20.0		%
Expected life (years)	6.00			6.07			5.95

The total intrinsic value of options exercised for the years ended December 31, 2019, 2018 and 2017 was $37.3 million, $21.5 million and $65.2 million, respectively.

The total fair value of shares vested for the years ended December 31, 2019, 2018 and 2017 was $43.7 million, $47.8 million and $44.7 million, respectively.

The NQSO transactions for the year ended December 31, 2019 were as follows:


	Outstanding								Exercisable
(in millions, except per share amounts)	Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value

December 31, 2018	6.4	$	46.80	$	4.5	5.0	$	43.98	$	4.5
Granted	0.6	49.71

Exercised	(2.7)	40.34
Cancelled	(0.4)	61.38
Forfeited	(0.1)	59.59
December 31, 2019	3.8	$	50.02	$	28.1	2.7	$	48.85	$	23.2

The weighted average remaining contractual term of all outstanding options is 5.4 years and the weighted average remaining contractual term of exercisable options is 4.1 years.

Information about NQSOs outstanding for the year ended December 31, 2019 were as follows:


			Outstanding							Exercisable
				Number Outstanding at December 31, 2019	Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price	Number Exercisable at December 31, 2019		Weighted Average Exercise Price
Range of Exercise Prices
(in millions, except per share amounts and life)




30.01	-	40.00	0.5	2.0	$	37.50	0.5	$	37.51
40.01	-	50.00	1.4	5.9	46.19		0.9	44.24
50.01	-	60.00	1.3	6.3	54.84		0.8	54.36
60.01	-	70.00	0.6	5.4	62.13		0.5	62.08
			3.8	5.4	$	50.02	2.7	$	48.85

The unvested RSU transactions for the year ended December 31, 2019 were as follows:


	Unvested Restricted Stock Units
	Shares	Weighted Average Grant Date Fair Value

(in millions, except per share amounts)

Unvested at December 31, 2018	1.5	$	56.93
Granted	3.7	45.69

Vested	(0.4)	54.60
Forfeited	(0.3)	55.99
Unvested at December 31, 2019	4.5	$	47.79