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STOCK OPTION AND STOCK UNIT PLANS (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]


December 31, 2021	Number	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
(options in thousands; intrinsic value in millions of Canadian dollars; weighted average exercise price in Canadian dollars)
Options outstanding at beginning of year	35,494	48.65
Options granted	4,072	43.86
Options exercised1	(4,142)	41.85
Options cancelled or expired	(1,407)	50.74
Options outstanding at end of year	34,017	49.28	5.7	128
Options vested at end of year2	22,029	49.84	4.5	64

1The total intrinsic value of ISOs exercised during the years ended December 31, 2021, 2020 and 2019 was $24 million, $13 million and $58 million, respectively, and cash received on exercise was $2 million, $4 million and $1 million, respectively.

2The total fair value of ISOs exercised during the years ended December 31, 2021, 2020 and 2019 was $25 million, $30 million and $32 million, respectively.

Schedule of weighted average assumptions used to determine the fair value of stock options granted

Weighted average assumptions used to determine the fair value of ISOs granted using the Black-Scholes-Merton option pricing model are as follows:


Year ended December 31,	2021		2020		2019
Fair value per option (Canadian dollars)1	4.10		4.01		4.37
Valuation assumptions
Expected option term (years)2	6		6		5
Expected volatility3	25.5	%	18.3	%	19.9	%
Expected dividend yield4	7.6	%	5.9	%	6.1	%
Risk-free interest rate5	0.7	%	1.3	%	2.0	%

1Options granted to US employees are based on NYSE prices. The option value and assumptions shown are based on a weighted average of the US and the Canadian options. The fair values per option for the years ended December 31, 2021, 2020 and 2019 were $3.91, $3.75 and $4.04, respectively, for Canadian employees and US$3.65, US$3.62 and US$4.09, respectively, for US employees.

2The expected option term is six years based on historical exercise practice and five years for retirement eligible employees.

3Expected volatility is determined with reference to historic daily share price volatility and consideration of the implied volatility observable in call option values near the grant date.

4The expected dividend yield is the current annual dividend at the grant date divided by the current stock price.

5The risk-free interest rate is based on the Government of Canada’s Canadian Bond Yields and the US Treasury Bond Yields.

Share-based payment arrangement, performance shares, activity


December 31, 2021	Number	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
(units in thousands; intrinsic value in millions of Canadian dollars)
Units outstanding at beginning of year	3,056
Units granted	1,895
Units cancelled	(76)
Units matured1	(1,664)
Dividend reinvestment	218
Units outstanding at end of year	3,429	1.1	181

1The total amount paid during the years ended December 31, 2021, 2020 and 2019 for PSUs was $70 million, $14 million and $19 million, respectively.

Schedule of outstanding stock units


December 31, 2021	Number	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
(units in thousands; intrinsic value in millions of Canadian dollars)
Units outstanding at beginning of year	2,453
Units granted	1,514
Units cancelled	(75)
Units matured1	(1,433)
Dividend reinvestment	246
Units outstanding at end of year	2,705	1.1	129

1The total amount paid during the years ended December 31, 2021, 2020 and 2019 for RSUs was $72 million, $27 million and $34 million, respectively.