Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

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

Schedule of Number of Common Shares Reserved for Issuance

The number of common shares reserved for issuance are as follows:



(in millions)	December 31,
	2018	2017
Shares available for granting under the 2002 Plan	33.3	33.8
Options outstanding	1.7	2.1
Total shares reserved for issuance ¹	35.0	35.9


¹	Shares reserved for issuance under the Director Deferred Stock Ownership Plan are not included in the total, but are less than 0.1 million.

Schedule of Stock-based Compensation Expense

Stock-based compensation expense and the corresponding tax benefit are as follows:



(in millions)	Year Ended December 31,
	2018		2017		2016
Stock option expense	$	5	$	3	$	7
Restricted stock and unit awards expense	89		96		69
Total stock-based compensation expense	$	94	$	99	$	76

Tax benefit	$	19	$	38	$	29

Schedule of Assumptions Used in Valuing the Options Granted

We use a lattice-based option-pricing model to estimate the fair value of options granted. The following assumptions were used in valuing the options granted:



	Year Ended
	December 31, 2018
Risk-free average interest rate	2.6 - 2.7%
Dividend yield	1.1		%
Volatility	21.8 - 22.0%
Expected life (years)	5.67 - 6.07
Weighted-average grant-date fair value per option	$	112.98

We use a lattice-based option-pricing model to estimate the fair value of options granted. The following assumptions were used in valuing the options granted:



	Year Ended
	December 31, 2018
Risk-free average interest rate	2.6 - 2.7%
Dividend yield	1.1		%
Volatility	21.8 - 22.0%
Expected life (years)	5.67 - 6.07
Weighted-average grant-date fair value per option	$	112.98

Schedule of Stock Option Activity

Stock option activity is as follows:



(in millions, except per award amounts)	Shares		Weighted average exercise price		Weighted-average remaining years of contractual term	Aggregate intrinsic value
Options outstanding as of December 31, 2017	2.1		$	44.09
Granted	0.2		$	74.11
Exercised	(0.6	)	$	161.14
Forfeited and expired ¹	—		$	71.68
Options outstanding as of December 31, 2018	1.7		$	47.92	3.3	$	202
Options exercisable as of December 31, 2018	1.6		$	46.69	3.1	$	195

¹ There are less 0.1 million shares forfeited and expired.



(in millions, except per award amounts)	Shares			Weighted-average grant-date fair value
Nonvested options outstanding as of December 31, 2017	—			$	27.52
Granted	0.2			$	112.98
Vested	(0.1		)	$	112.36
Forfeited ¹	—			$	112.14
Nonvested options outstanding as of December 31, 2018	0.1			$	113.02
Total unrecognized compensation expense related to nonvested options	$	2
Weighted-average years to be recognized over	2.0


¹	There are less than 0.1 million shares forfeited.

Schedule of Stock Option Exercises

Information regarding our stock option exercises is as follows:



(in millions)	Year Ended December 31,
	2018		2017		2016
Net cash proceeds from the exercise of stock options	$	34	$	75	$	88
Total intrinsic value of stock option exercises	$	77	$	118	$	95
Income tax benefit realized from stock option exercises	$	27	$	64	$	41

Schedule of Restricted Stock and Unit Activity

Restricted stock and unit activity for performance and non-performance awards is as follows:



(in millions, except per award amounts)	Shares			Weighted-average grant-date fair value
Nonvested shares as of December 31, 2017	0.8			$	124.91
Granted	1.0			$	182.75
Vested	(0.9		)	$	167.13
Forfeited	(0.1		)	$	149.03
Nonvested shares as of December 31, 2018	0.8			$	172.24
Total unrecognized compensation expense related to nonvested awards	$	76
Weighted-average years to be recognized over	1.9



	Year Ended December 31,
	2018		2017		2016
Weighted-average grant-date fair value per award	$	182.75	$	147.12	$	93.01
Total fair value of restricted stock and unit awards vested	$	154	$	147	$	99
Tax benefit relating to restricted stock activity	$	32	$	36	$	26