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STOCK-BASED COMPENSATION PLANS
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Share-based Payment Arrangement [Text Block] Stock-Based Compensation Plans
The 2016 Stock Incentive Plan of Honeywell International Inc. and its Affiliates (2016 Plan) and 2016 Stock Plan for Non-Employee Directors of Honeywell International Inc. (2016 Directors Plan) were both approved by the shareowners at the Annual Meeting of Shareowners effective on April 25, 2016. Following approval of both plans, we have not and will not grant any new awards under any previously existing stock-based compensation plans. At December 31, 2019, there were 37,364,854, and 866,273 shares of Honeywell common stock available for future grants under terms of the 2016 Plan and 2016 Directors Plan, respectively.
Stock Options—The exercise price, term and other conditions applicable to each option granted under the Company's stock plans are generally determined by the Management Development and Compensation Committee of the Board. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock on that date. The fair value is recognized as an expense over the employee’s requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on our common stock and historical volatility of our common stock. We used a Monte Carlo simulation model to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
The following table summarizes the impact to the Consolidated Statement of Operations from stock options:
 
Years Ended December 31,
2019
 
2018
 
2017
Compensation expense
$
47

 
$
64

 
$
79

Future income tax benefit recognized
10

 
13

 
17


The following table sets forth fair value per share information, including related weighted-average assumptions, used to determine compensation cost.
 
Years Ended December 31,
2019
 
2018
 
2017
Weighted average fair value per share of options granted during the year(1)
$
21.57

 
$
23.63

 
$
16.68

Assumptions:
 
 
 
 
 
Expected annual dividend yield
2.65
%
 
2.49
%
 
2.81
%
Expected volatility
18.40
%
 
18.93
%
 
18.96
%
Risk-free rate of return
2.46
%
 
2.71
%
 
2.02
%
Expected option term (years)
4.87

 
4.95

 
5.04

(1)
Estimated on date of grant using Black-Scholes option-pricing model.
The following table summarizes information about stock option activity for the three years ended December 31, 2019:
 
Number of
Options
 
Weighted
Average
Exercise
Price
Outstanding at December 31, 2016
28,667,300

 
$
79.57

Granted
5,098,569

 
125.16

Exercised
(8,840,019
)
 
62.34

Lapsed or canceled
(1,516,557
)
 
109.04

Outstanding at December 31, 2017
23,409,293

 
94.16

Spin related adjustment(1)
989,158

 
 
Granted
3,303,722

 
148.48

Exercised
(3,399,375
)
 
78.29

Lapsed or canceled
(1,824,217
)
 
123.01

Outstanding at December 31, 2018
22,478,581

 
97.83

Granted
3,136,058

 
155.43

Exercised
(5,897,060
)
 
84.31

Lapsed or canceled
(986,017
)
 
136.15

Outstanding at December 31, 2019
18,731,562

 
$
109.87

Vested and expected to vest at December 31, 2019(2)
17,636,444

 
$
107.39

Exercisable at December 31, 2019
11,620,992

 
$
92.19

(1)
Additional options granted to offset the dilutive impact of the spin-offs on outstanding options.
(2)
Represents the sum of vested options of 11.6 million and expected to vest options of 6.0 million. Expected to vest options are derived by applying the pre-vesting forfeiture rate assumption to total outstanding unvested options of 7.1 million.
The following table summarizes information about stock options outstanding and exercisable at December 31, 2019:
Range of Exercise Prices
Options Outstanding
 
Options Exercisable
Number
Outstanding
 
Weighted
Average Life(1)
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
 
Number
Exercisable
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
$27.00–$64.99
1,621,042

 
1.87
 
$
55.38

 
$
197

 
1,621,042

 
$
55.38

 
$
197

$65.00–$89.99
3,388,800

 
3.74
 
79.79

 
329

 
3,388,800

 
79.79

 
329

$90.00–$99.99
5,266,409

 
5.70
 
98.80

 
412

 
4,461,659

 
98.81

 
349

$100.00–$134.99
3,344,472

 
7.11
 
119.07

 
194

 
1,636,518

 
118.65

 
95

$135.00–$180.99
5,110,839

 
8.76
 
152.49

 
125

 
512,973

 
148.52

 
15

 
18,731,562

 
6.10
 
$
109.87

 
$
1,257

 
11,620,992

 
$
92.19

 
$
985

(1)
Average remaining contractual life in years.
There were 14,073,120 and 12,288,854 options exercisable at weighted average exercise prices of $83.42 and $78.35 at December 31, 2018 and 2017.
The following table summarizes the financial statement impact from stock options exercised:
Options Exercised
Years Ended December 31,
2019
 
2018
 
2017
Intrinsic value(1)
$
483

 
$
238

 
$
620

Tax benefit realized
117

 
47

 
221

(1)
Represents the amount by which the stock price exceeded the exercise price of the options on the date of exercise.
At December 31, 2019 there was $88 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 2.47 years. The total fair value of options vested during 2019, 2018 and 2017 was $61 million, $73 million and $87 million.
Restricted Stock Units—Restricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain key employees and directors as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to six years and are payable in Honeywell common stock upon vesting.
The following table summarizes information about RSU activity for the three years ended December 31, 2019:
 
Number of
Restricted
Stock Units
 
Weighted
Average
Grant Date
Fair Value
Per Share
Non-vested at December 31, 2016
4,467,343

 
$
94.17

Granted
1,274,791

 
129.71

Vested
(1,289,892
)
 
81.37

Forfeited
(505,415
)
 
103.06

Non-vested at December 31, 2017
3,946,827

 
108.60

Spin related adjustment(1)
154,346

 
 
Granted
1,360,338

 
153.46

Vested
(988,787
)
 
91.68

Forfeited
(814,851
)
 
117.40

Non-vested at December 31, 2018
3,657,873

 
125.35

Granted
1,200,202

 
162.43

Vested
(1,160,333
)
 
104.32

Forfeited
(457,677
)
 
134.50

Non-vested at December 31, 2019
3,240,065

 
$
143.07

(1)
Additional RSU grants to offset the dilutive impact of the spin-offs on non-vested RSUs.
As of December 31, 2019, there was approximately $217 million of total unrecognized compensation cost related to non-vested RSUs granted under our stock plans which is expected to be recognized over a weighted-average period of 2.86 years.
The following table summarizes the impact to the Consolidated Statement of Operations from RSUs:
 
Years Ended December 31,
2019
 
2018
 
2017
Compensation expense
$
106

 
$
111

 
$
97

Future income tax benefit recognized
21

 
21

 
19