STOCK-BASED EMPLOYEE COMPENSATION

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-based compensation expense included in personnel expenses in the Unaudited Consolidated Statements of Operations was $79 million and $70 million for the three months ended September 30, 2019 and 2018, respectively, and $232 million and $216 million for the nine months ended September 30, 2019 and 2018, respectively.

Stock-based compensation expense is recognized in the consolidated financial statements based upon fair value. Fair value is recognized as an expense on a straight-line basis over the employee's requisite service period and forfeitures are accounted for when they occur. The fair value on the grant date of performance share units and restricted stock units is determined based on the number of units granted and the quoted price of the Company's common stock. Stock-based compensation expense related to performance share units reflects the estimated probable outcome at the end of the performance period. The fair value of employee stock options assumed in acquisitions was determined using the Black-Scholes model and the market value of the Company's common stock at the respective acquisition dates.

Restricted Stock Units and Performance Share Units

The following table summarizes the activity of restricted stock units and performance share units ("share-based awards") during the nine months ended September 30, 2019:



Share-Based Awards	Shares		Weighted-average Grant Date Fair Value
Unvested at December 31, 2018	511,562			$	1,713
Granted	214,225			$	1,729
Vested	(206,561	)		$	1,462
Performance shares adjustment	1,266			$	1,682
Forfeited/Canceled	(36,335	)		$	1,797
Unvested at September 30, 2019	484,157			$	1,820

At September 30, 2019, there was $495 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 1.9 years.

During the nine months ended September 30, 2019, the Company made broad-based grants of 152,313 restricted stock units that generally vest over a three-year period, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. These share-based awards had a total grant date fair value of $264 million based on a weighted-average grant-date fair value per share of $1,734.

Performance share units are payable in shares of the Company's common stock upon vesting. Subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability, recipients of these performance share units generally must continue their service through the requisite service period in order to receive any shares. Stock-based compensation expense related to performance share units reflects the estimated probable outcome at the end of the performance period.

2019 Performance Share Units

During the nine months ended September 30, 2019, the Company granted 61,912 performance share units to executives and certain other employees. The performance share units had a total grant-date fair value of $106 million based on a weighted-average grant-date fair value per share of $1,716. The actual number of shares to be issued on the vesting date will be determined upon completion of the performance period which generally ends December 31, 2021, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances. At September 30, 2019, the estimated number of probable shares to be issued was a total of 61,037 shares, net of performance share units that were forfeited or vested since the grant date, including 47,619 shares that are not subject to the achievement of minimum performance thresholds. If the maximum performance thresholds are met at the end of the performance period, a maximum number of 122,074 total shares could be issued pursuant to these performance share units.

2018 Performance Share Units

During the year ended December 31, 2018, the Company granted 49,721 performance share units with a grant-date fair value of $101 million, based on a weighted-average grant-date fair value per share of $2,034. The actual number of shares to be issued will be determined upon completion of the performance period which generally ends December 31, 2020, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances.

At September 30, 2019, there were 41,211 unvested 2018 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. At September 30, 2019, the number of shares estimated to be issued pursuant to these performance share units at the end of the performance period was a total of 77,810 shares, including 29,901 shares that are not subject to the achievement of minimum performance thresholds. If the maximum performance thresholds are met at the end of the performance period, a maximum of 82,422 shares could be issued pursuant to these performance share units.

2017 Performance Share Units

During the year ended December 31, 2017, the Company granted 73,893 performance share units with a grant-date fair value of $128 million, based on a weighted-average grant-date fair value per share of $1,735. The actual number of shares to be issued will be determined upon completion of the performance period which generally ends December 31, 2019, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances.

At September 30, 2019, there were 51,523 unvested 2017 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. At September 30, 2019, the number of shares estimated to be issued pursuant to these performance share units at the end of the performance period was a total of 80,459 shares, including 40,860 shares that are not subject to the achievement of minimum performance thresholds. If the maximum thresholds are met at the end of the performance period, a maximum of 103,046 shares could be issued pursuant to these performance share units.

Stock Options

All outstanding employee stock options were assumed in acquisitions. The following table summarizes the activity for stock options during the nine months ended September 30, 2019:



Employee Stock Options	Number of Shares		Weighted-average Exercise Price			Aggregate Intrinsic Value (in millions)			Weighted-average Remaining Contractual Term (in years)
Balance, December 31, 2018	27,263			$	387		$	36	2.8
Exercised	(2,536	)		$	397
Balance, September 30, 2019	24,727			$	386		$	39	2.0
Vested and exercisable at September 30, 2019	24,727			$	386		$	39	2.0

The aggregate intrinsic value of employee stock options exercised during the nine months ended September 30, 2019 and 2018 was $4 million and $5 million, respectively.