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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

The following table summarizes the Company’s stock option plan as at December 31, 2019:



	Options outstanding				Non-vested options
	Number of options		Weighted-average exercise price		Number of options		Weighted-average grant date fair value
Outstanding, January 1, 2019	1,533,598		$	176.02	714,102		$	48.94
Granted	224,730		$	269.99	224,730		$	63.69
Exercised	(334,127	)	$	125.12	N/A		N/A
Vested	N/A		N/A		(169,193	)	$	47.59
Forfeited	(7,855	)	$	234.59	(7,855	)	$	54.75
Outstanding, December 31, 2019	1,416,346		$	199.12	761,784		$	53.54
Vested or expected to vest at December 31, 2019⁽¹⁾	1,385,626		$	197.89	N/A		N/A
Exercisable, December 31, 2019	654,562		$	162.59	N/A		N/A

⁽¹⁾As at December 31, 2019, the weighted-average remaining term of vested or expected to vest options was 4.9 years with an aggregate intrinsic value of $184 million.

Stock Options Outstanding and Exercisable

The following table provides the number of stock options outstanding and exercisable as at December 31, 2019 by range of exercise price and their related intrinsic aggregate value, and for options outstanding, the weighted-average years to expiration. The table also provides the aggregate intrinsic value for in-the-money stock options, which represents the amount that would have been received by option holders had they exercised their options on December 31, 2019 at the Company’s closing stock price of $331.03.



	Options outstanding						Options exercisable
Range of exercise prices	Number of options	Weighted-average years to expiration	Weighted-average exercise price		Aggregate intrinsic value (millions)		Number of options	Weighted-average exercise price		Aggregate intrinsic value (millions)
$51.17 – $167.50	354,357	4.1	$	123.00	$	74	303,455	$	116.84	$	65
$167.51 – $197.05	355,040	4.1	$	188.53	$	51	135,532	$	175.30	$	21
$197.06– $247.87	376,654	4.8	$	222.75	$	41	215,465	$	218.98	$	24
$247.88 – $313.16	330,295	5.9	$	265.23	$	22	110	$	260.52	$	—
Total⁽¹⁾	1,416,346	4.7	$	199.12	$	187	654,562	$	162.59	$	110

⁽¹⁾ As at December 31, 2019, the total number of in-the-money stock options outstanding was 1,416,346 with a weighted-average exercise price of $199.12. The weighted-average years to expiration of exercisable stock options is 4.2 years.

Weighted-Average Fair Value Assumptions

The weighted-average fair value assumptions were approximately:



	2019			2018			2017
Expected option life (years)⁽¹⁾	5.00			5.00			5.48
Risk-free interest rate⁽²⁾	2.22		%	2.22		%	1.85		%
Expected stock price volatility⁽³⁾	25.04		%	24.81		%	26.94		%
Expected annual dividends per share⁽⁴⁾	$	2.6191		$	2.3854		$	2.0010
Expected forfeiture rate⁽⁵⁾	6.05		%	4.70		%	2.80		%
Weighted-average grant date fair value of options granted during the year	$	63.69		$	55.63		$	45.78

⁽¹⁾ Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour or, when available, specific expectations regarding future exercise behaviour were used to estimate the expected life of the option.

⁽²⁾ Based on the implied yield available on zero-coupon government issues with an equivalent term commensurate with the expected term of the option.

⁽³⁾ Based on the historical volatility of the Company’s stock price over a period commensurate with the expected term of the option.

⁽⁴⁾ Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On May 6, 2019, the Company announced an increase in its quarterly dividend to $0.8300 per share, representing $3.3200 on an annual basis.

⁽⁵⁾ The Company estimates forfeitures based on past experience. The rate is monitored on a periodic basis.

Schedule of Options Exercised

The following table provides information related to all options exercised in the stock option plan during the years ended December 31:



(in millions of Canadian dollars)	2019		2018		2017
Total intrinsic value	$	63	$	17	$	36
Cash received by the Company upon exercise of options	26		24		45

Summary of Performance Share Unit Plan

The following table summarizes information related to the Company’s PSUs as at December 31:



	2019		2018
Outstanding, January 1	395,048		334,028
Granted	134,260		162,255
Units, in lieu of dividends	4,032		3,643
Settled	(117,228	)	(66,243	)
Forfeited	(12,976	)	(38,635	)
Outstanding, December 31	403,136		395,048

Summary of Deferred Share Unit Plan

The following table summarizes information related to the DSUs as at December 31:



	2019		2018
Outstanding, January 1	152,760		156,547
Granted	19,912		16,481
Units, in lieu of dividends	1,608		1,551
Settled	(12,110	)	(20,072	)
Forfeited	(951	)	(1,747	)
Outstanding, December 31	161,219		152,760

Summary of Share-Based Liabilities Paid

The following table summarizes the total share-based liabilities paid for each of the years ended December 31:



(in millions of Canadian dollars)	2019		2018		2017
Plan
PSUs	$	54	$	30	$	31
DSUs	4		6		6
Other	—		1		2
Total	$	58	$	37	$	39

- Definition

Tabular disclosure of an equity-based arrangement (such as stock or unit options and stock or unit awards) with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain equity-based awards at future dates, sometimes including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares or units issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability.

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