Stock Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock Plans

Note 11. 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, 2023	20,490,250	$46.31	5 years	$	417	million
Annual grant to eligible employees	2,452,110	65.36
Additional options issued	3,820	66.78
Total options granted	2,455,930	65.36
Options exercised (1)	(2,844,348)	37.84		$	93	million
Options canceled	(159,460)	53.03
Balance at June 30, 2023	19,942,372	49.81	5 years	$	461	million

(1)Cash received from options exercised was $56 million in the three months and $105 million in the six months ended June 30, 2023. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $9 million in the three months and $17 million in the six months ended June 30, 2023

Performance Share Units and Other Stock-Based Awards

Our performance share unit (PSU), deferred stock unit (DSU) and other stock-based activity is reflected below:

	Number of Shares	Grant Date	Weighted-Average Fair Value Per Share (4)	Weighted-Average Aggregate Fair Value (3)
Balance at January 1, 2023	4,451,674		$60.12
Annual grant to eligible employees:		Mar 2, 2023
Performance share units	895,410		68.59
Deferred stock units	578,570		65.36
Additional shares granted (1)	710,633	Various	65.54
Total shares granted	2,184,613		66.74	$	146	million
Vested (2) (3)	(1,626,765)		62.75	$	102	million
Forfeited (2)	(144,096)		61.28
Balance at June 30, 2023	4,865,426		62.18

(1)Includes PSUs and DSUs.

(2)Includes PSUs, DSUs and other stock-based awards.

(3)The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled zero in the three months and $2 million in the six months ended June 30, 2023.

(4)The grant date fair value of PSUs 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 2020, our Board of Directors authorized the repurchase of a total of $23.7 billion of our Common Stock and extended the program through December 31, 2023. Prior to January 1, 2023, we had repurchased approximately $22.0 billion of Common Stock pursuant to this authorization. Our Board of Directors approved a new program authorizing the repurchase of up to $6.0 billion of our Common Stock through December 31, 2025. This authorization, effective January 1, 2023, replaced our previous share repurchase program. Repurchases under the program are determined by management and are wholly discretionary.

During the six months ended June 30, 2023, we repurchased approximately 8.8 million shares of Common Stock at an average cost of $68.16 per share, or an aggregate cost of approximately $602 million, all of which was paid

during the period except for approximately $6 million settled in July 2023. All share repurchases were funded through available cash and commercial paper issuances. As of June 30, 2023, we have approximately $5.4 billion in remaining share repurchase capacity.