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STOCK OPTION AND STOCK UNIT PLANS (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]


December 31, 2022	Number	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
(options in thousands; weighted average exercise price in Canadian dollars; intrinsic value in millions of Canadian dollars)
Options outstanding at beginning of year	34,017	49.28
Options granted	3,430	49.58
Options exercised1	(8,684)	44.55
Options cancelled or expired	(1,139)	51.32
Options outstanding at end of year	27,624	48.46	5.7	133
Options vested at end of year2	17,631	49.20	4.4	84

1The total intrinsic value of ISOs exercised during the years ended December 31, 2022, 2021 and 2020 was $66 million, $24 million and $13 million, respectively, and cash received on exercise was $3 million, $2 million and $4 million, respectively.

2The total fair value of ISOs exercised during the years ended December 31, 2022, 2021 and 2020 was $21 million, $25 million and $30 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,	2022		2021		2020
Fair value per option (Canadian dollars)1	5.07		4.10		4.01
Valuation assumptions
Expected option term (years)2	6		6		6
Expected volatility3	21.9	%	25.5	%	18.3	%
Expected dividend yield4	6.5	%	7.6	%	5.9	%
Risk-free interest rate5	1.8	%	0.7	%	1.3	%

1Options granted to US employees are based on the New York Stock Exchange 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, 2022, 2021 and 2020 were $4.78, $3.91 and $3.75, respectively, for Canadian employees and US$4.62, US$3.65 and US$3.62, 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, 2022	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	3,429
Units granted	1,467
Units cancelled	(131)
Units matured1	(1,700)
Dividend reinvestment	184
Units outstanding at end of year	3,249	1.1	261

1The total amount paid during the years ended December 31, 2022, 2021 and 2020 for PSUs was $90 million, $70 million and $14 million, respectively.

Schedule of Outstanding Stock Units


December 31, 2022	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	2,705
Units granted	1,400
Units cancelled	(134)
Units matured1	(602)
Dividend reinvestment	196
Units outstanding at end of year	3,565	1.0	185

1The total amount paid during the years ended December 31, 2022, 2021 and 2020 for RSUs was $32 million, $72 million and $27 million, respectively.