Stock Transactions And Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Summary of Share Activity

The following table summarizes the Company’s share activity for the years ended December 31 (shares in millions):

	2020	2019	2018
Preferred stock - shares issued:
Balance, beginning of period	1.7	—	—
Issuance of MCPS	1.7	1.7	—
Balance, end of period	3.4	1.7	—
Common stock - shares issued:
Balance, beginning of period	835.5	817.9	812.5
Common stock-based award activity	4.5	4.6	4.6
Common stock issued in connection with acquisitions	—	—	0.2
Common stock issued in connection with LYONs’ conversions	0.4	0.9	0.6
Issuance of common stock	10.9	12.1	—
Balance, end of period	851.3	835.5	817.9

Key Terms of Shares

The following summarizes the key terms of the MCPS Shares as of December 31, 2020:

	Annual Cumulative Dividend Rate		Liquidation Preference per Share		Minimum Conversion Rate	Maximum Conversion Rate	Mandatory Conversion Date
Series A	4.75	%	$	1,000	6.6563 shares	8.1538 shares	April 15, 2022
Series B	5.00	%	$	1,000	5.0081 shares	6.1349 shares	April 15, 2023

Assumptions Used In The Black-Scholes Model To Value Options Granted

The following summarizes the assumptions used in the Black-Scholes model to value options granted during the years ended December 31:

	2020		2019		2018
Risk-free interest rate	0.3 – 1.3%		1.7 – 2.6%		2.6 – 3.1%
Weighted average volatility	24.3	%	20.4	%	21.4	%
Dividend yield	0.4	%	0.5	%	0.6	%
Expected years until exercise	5.0 – 8.0		5.0 – 8.0		5.0 – 8.0

Components Of Share-Based Compensation Program

The following summarizes the components of the Company’s continuing operations stock-based compensation expense for the years ended December 31 ($ in millions):

	2020		2019		2018
RSUs/PSUs:
Pretax compensation expense	$	114	$	97	$	86
Income tax benefit	(24)		(20)		(17)
RSU/PSU expense, net of income taxes	90		77		69
Stock options:
Pretax compensation expense	73		62		52
Income tax benefit	(15)		(13)		(11)
Stock option expense, net of income taxes	58		49		41
Total stock-based compensation:
Pretax compensation expense	187		159		138
Income tax benefit	(39)		(33)		(28)
Total stock-based compensation expense, net of income taxes	$	148	$	126	$	110

Option Activity Under The Company's Stock Plans

The following summarizes option activity under the Company’s stock plans (in millions, except weighted exercise price and number of years):

	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2018	18.8	$	59.84
Granted	4.1	99.51
Exercised	(3.4)	41.88
Cancelled/forfeited	(0.9)	80.14
Outstanding as of December 31, 2018	18.6	70.86
Granted	4.3	117.32
Exercised	(3.5)	53.02
Cancelled/forfeited	(0.9)	98.98
Adjustment due to Envista Split-Off (a)	(1.5)	91.65
Outstanding as of December 31, 2019	17.0	82.95
Granted	2.9	160.71
Exercised	(3.5)	62.54
Cancelled/forfeited	(0.5)	113.94
Outstanding as of December 31, 2020	15.9	100.65		7	$	1,931
Vested and expected to vest as of December 31, 2020 (b)	15.4	$	99.61	7	$	1,887
Vested as of December 31, 2020	6.3	$	74.00	5	$	940

(a)    The “Adjustment due to Envista Split-Off” reflects the cancellation of options which were outstanding as of December 18, 2019 and held by Envista employees, which have been terminated and replaced by Envista equity awards as part of the Envista Split-Off.

(b)    The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

Summary Of Options Outstanding

Options outstanding as of December 31, 2020 are summarized below (in millions, except price per share and number of years):

	Outstanding				Exercisable
Exercise Price	Shares	Average Exercise Price		Average Remaining Life (in years)	Shares	Average Exercise Price
$36.87 to $52.96	1.0	$	43.97	2	1.0	$	43.96
$52.97 to $66.70	2.7	63.94		4	2.1	63.41
$66.71 to $99.32	3.7	82.40		6	2.0	78.94
$99.33 to $131.04	5.2	106.64		8	1.1	104.20
$131.05 to $234.68	3.3	156.93		9	0.1	139.44

RSU And Restricted Stock Activity

The following summarizes information on unvested RSU and PSU activity (in millions, except weighted average grant-date fair value):

	Number of RSUs/PSUs	Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2018	3.9	$	71.27
Granted	1.5	99.15
Vested	(1.2)	68.37
Forfeited	(0.3)	78.41
Unvested as of December 31, 2018	3.9	82.21
Granted	1.4	115.38
Vested	(1.1)	75.51
Forfeited	(0.3)	92.82
Adjustment due to Envista Split-Off (a)	(0.4)	98.18
Unvested as of December 31, 2019	3.5	94.85
Granted	1.1	159.93
Vested	(1.0)	91.08
Forfeited	(0.2)	111.59
Unvested as of December 31, 2020	3.4	116.03

(a)    The “Adjustment due to Envista Split-Off” reflects the cancellation of RSUs and PSUs which were outstanding as of December 18, 2019 and held by Envista employees which have been terminated and replaced by Envista equity awards as part of the Envista Split-Off.