STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock-based compensation cost	$	38	$	33	$	110	$	103
Tax benefit	$	8	$	7	$	22	$	22

During the first nine months of 2020, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $60.66 per share based on the Black-Scholes option-pricing model. The Company also granted 0.5 million shares of restricted stock in the first nine months of 2020, which had a weighted average grant date fair value of $278.92 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.1 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market-based performance metrics of the Company over three years. The weighted average grant date fair value of these awards was $273.81 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2020:


Expected dividend yield			0.80 %
Expected stock volatility			22.52 %
Risk-free interest rate			1.43 %
Expected holding period			5.7 years

Unrecognized stock-based compensation expense at September 30, 2020 was $8 million and $192 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 2.4 years and 2.5 years, respectively. Additionally, there was $34 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.0 years.

The following tables summarize information relating to stock option exercises and restricted stock vesting:


	Nine Months Ended September 30,
	2020		2019
Exercise of stock options:
Proceeds from stock option exercises	$	32	$	29
Aggregate intrinsic value	$	102	$	99
Tax benefit realized upon exercise	$	24	$	24
Number of shares exercised	0.5		0.7
Vesting of restricted stock:
Fair value of shares vested	$	195	$	153
Tax benefit realized upon vesting	$	45	$	36
Number of shares vested	0.8		0.8
Vesting of performance-based restricted stock:
Fair value of shares vested	$	70	$	48
Tax benefit realized upon vesting	$	17	$	12
Number of shares vested	0.3		0.3