Stock Plans

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Note 12. Stock Plans

Stock Options:

Stock option activity is reflected below:



	Shares Subject to Option		Weighted- Average Exercise or Grant Price Per Share	Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance at January 1, 2019	43,818,830		$32.36	5 years	$	371	million
Annual grant to eligible employees	4,793,570		47.72
Additional options issued	60,030		51.25
Total options granted	4,853,600		47.76
Options exercised ⁽¹⁾	(13,011,929	)	27.46		$	290	million
Options canceled	(1,080,142	)	42.01
Balance at September 30, 2019	34,580,359		36.07	6 years	$	666	million


(1)	Cash received from options exercised was $56 million in the three months and $349 million in the nine months ended September 30, 2019. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $8 million in the three months and $37 million in the nine months ended September 30, 2019.

Performance Share Units and Other Stock-Based Awards:

Our performance share unit, deferred stock unit and historically granted restricted stock activity is reflected below:



	Number of Shares		Grant Date	Weighted-Average Fair Value Per Share ⁽³⁾	Weighted-Average Aggregate Fair Value ⁽³⁾
Balance at January 1, 2019	6,559,010			$42.19
Annual grant to eligible employees:			Feb 22, 2019
Performance share units	891,210			57.91
Deferred stock units	666,880			47.72
Additional shares granted ⁽¹⁾	120,083		Various	55.05
Total shares granted	1,678,173			53.65	$	90	million
Vested ⁽²⁾	(1,679,731	)		36.90	$	62	million
Forfeited ⁽²⁾	(633,821	)		45.86
Balance at September 30, 2019	5,923,631			46.54


(1)	Includes performance share units and deferred stock units.


(2)	Includes performance share units, deferred stock units and historically granted restricted stock. The actual tax benefit/(expense) realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $1 million in the three months and $2 million in the nine months ended September 30, 2019.

(3)

The grant date fair value of performance share units is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components. The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition. Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved, so long as the requisite service has been provided.

Share Repurchase Program:

Between 2013 and 2017, our Board of Directors authorized the repurchase of a total of $13.7 billion of our Common Stock through December 31, 2018. On January 31, 2018, our Finance Committee, with authorization delegated from our Board of Directors, approved an increase of $6.0 billion in the share repurchase program, raising the authorization to $19.7 billion of Common Stock repurchases, and extended the program through December 31, 2020. Repurchases under the program are determined by management and are wholly discretionary. Prior to January 1, 2019, we had repurchased $15.0 billion of Common Stock pursuant to this authorization. During the nine months ended September 30, 2019, we repurchased approximately 24 million shares of Common Stock at an average cost of $47.21 per share, or an aggregate cost of approximately $1.2 billion, all of which was paid during the period except for approximately $5 million settled in October 2019. All share repurchases were funded through available cash and commercial paper issuances. As of September 30, 2019, we have $3.5 billion in remaining share repurchase capacity.