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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
Our 2014 Long Term Stock Incentive Plan (the "2014 Plan") provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At December 31, 2019, outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units, and phantom stock awards.
Pre-tax compensation expense (income) included in income from continuing operations for these stock-based incentives was as follows, in millions:
 
2019
 
2018
 
2017
Long-term stock awards
$
20

 
$
20

 
$
21

Stock options
4

 
3

 
3

Restricted stock units
3

 
4

 
2

Phantom stock awards and stock appreciation rights
4

 
(2
)
 
8

Total
$
31

 
$
25

 
$
34


At December 31, 2019, 13.9 million shares of our common stock were available under the 2014 Plan for the granting of long-term stock awards, stock options and restricted stock units.





L. STOCK-BASED COMPENSATION (Continued)
Long-Term Stock Awards.    Long-term stock awards are granted to our key employees and non-employee Directors and do not cause net share dilution, as we repurchase and retire at least an equal number of shares in the open market. We granted 636,030 shares of long-term stock awards during 2019.
Our long-term stock award activity was as follows, shares in millions:

 
2019
 
2018
 
2017
Unvested stock award shares at January 1
2

 
3

 
4

Weighted average grant date fair value
$
30

 
$
24

 
$
20

Stock award shares granted
1

 
1

 
1

Weighted average grant date fair value
$
36

 
$
41

 
$
34

Stock award shares vested
1

 
2

 
2

Weighted average grant date fair value
$
25

 
$
21

 
$
18

Stock award shares forfeited
—

 
—

 
—

Weighted average grant date fair value
$
35

 
$
31

 
$
24

Unvested stock award shares at December 31
2

 
2

 
3

Weighted average grant date fair value
$
34

 
$
30

 
$
24


At December 31, 2019, 2018 and 2017, there was $41 million, $46 million and $46 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of three years at December 31, 2019, 2018 and 2017.
The total market value (at the vesting date) of stock award shares which vested during 2019, 2018 and 2017 was $31 million, $56 million and $45 million, respectively.
Stock Options.    Stock options are granted to certain key employees. The exercise price equals the market price of our common stock at the grant date. These options generally become exercisable (vest ratably) over five years beginning on the first anniversary from the date of grant and expire no later than 10 years after the grant date.
We granted 561,280 shares of stock options during 2019 with a grant date weighted-average exercise price of approximately $36 per share. During 2019, 108,086 stock option shares were forfeited (including options that expired unexercised).





















L. STOCK-BASED COMPENSATION (Continued)

Our stock option activity was as follows, shares in millions:
 
2019
 
2018
 
2017
Option shares outstanding, January 1
4

 
5

 
7

Weighted average exercise price
$
21

 
$
16

 
$
15

Option shares granted
1

 
—

 
—

Weighted average exercise price
$
36

 
$
42

 
$
34

Option shares exercised
2

 
1

 
2

Aggregate intrinsic value on date of exercise (A)
$
33
 million
 
$
55
 million
 
$
47
 million
Weighted average exercise price
$
13

 
$
11

 
$
15

Option shares forfeited
—

 
—

 
—

Weighted average exercise price
$
34

 
$
31

 
$
—

Option shares outstanding, December 31
3

 
4

 
5

Weighted average exercise price
$
27

 
$
21

 
$
16

Weighted average remaining option term (in years)
6
 
5
 
4
Option shares vested and expected to vest, December 31
3

 
4

 
5

Weighted average exercise price
$
27

 
$
21

 
$
16

Aggregate intrinsic value (A)
$
63
 million
 
$
36
 million
 
$
147
 million
Weighted average remaining option term (in years)
6
 
5
 
4
Option shares exercisable (vested), December 31
2

 
3

 
4

Weighted average exercise price
$
21

 
$
16

 
$
13

Aggregate intrinsic value (A)
$
47
 million
 
$
34
 million
 
$
123
 million
Weighted average remaining option term (in years)
4
 
4
 
3
                                                                     
(A)
Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares.
At December 31, 2019, 2018 and 2017, there was $9 million, $8 million and $7 million, respectively, of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of three years at December 31, 2019, 2018 and 2017.
The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows:
 
2019
 
2018
 
2017
Weighted average grant date fair value
$
8.81

 
$
12.34

 
$
9.68

Risk-free interest rate
2.57
%
 
2.72
%
 
2.16
%
Dividend yield
1.35
%
 
1.02
%
 
1.19
%
Volatility factor
25.00
%
 
29.00
%
 
30.00
%
Expected option life
6 years

 
6 years

 
6 years


    




L. STOCK-BASED COMPENSATION (Concluded)
The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2019, shares in millions:
 
Option Shares Outstanding
 
Option Shares Exercisable
 
Range of
Prices
 
Number of
Shares
 
Weighted
Average
Remaining
Option Term
 
Weighted
Average
Exercise
Price
 
Number of
Shares
 
Weighted
Average
Exercise
Price
$
10 - 12
 
—
 
1 year
 
$11
 
—
 
$11
$
18 - 26
 
2
 
4 years
 
$21
 
2
 
$20
$
30 - 42
 
1
 
8 years
 
$37
 
—
 
$36
$
10 - 42
 
3
 
6 years
 
$27
 
2
 
$21


Restricted Stock Units. Under our Long Term Incentive Program, we grant restricted stock units to certain senior executives. These restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement of specified return on invested capital performance goals over a three-year period that have been established by our Organization and Compensation Committee of the Board of Directors ("Compensation Committee") for the performance period and the recipient's continued employment through the share award date. Restricted stock units are granted at a target number; based on our performance, the number of restricted stock units that vest can be adjusted downward to zero and upward to a maximum of 200% of the target number. During 2019, we granted 126,680 restricted stock units with a grant date fair value of approximately $39 per share, and 15,600 restricted stock units were forfeited. At December 31, 2019, there were 147,199 shares vested, but unissued. During 2018, we granted 113,260 restricted stock units with a grant date fair value of approximately $42 per share, and 11,600 restricted stock units were forfeited. During 2017, we granted 124,780 restricted stock units with a grant date fair value of approximately $34 per share.

Phantom Stock Awards and Stock Appreciation Rights.    Certain non-U.S. employees are granted phantom stock awards and historically have been granted SARs.
We recognized expense of $4 million in 2019, income of $1 million in 2018, and expense of $6 million in 2017 related to phantom stock awards. In 2019, 2018 and 2017, we granted 79,500, 98,140, and 104,580 shares, respectively, of phantom stock awards with an aggregate fair value of $3 million in 2019 and $4 million in both 2018 and 2017, and paid cash of $3 million in 2019, $6 million in 2018, and $5 million in 2017 to settle phantom stock awards.
We recognized income of $1 million in 2018 and expense of $2 million in 2017 related to SARs. During 2019, 2018 and 2017, we did not grant any SARs. We paid cash of $2 million, $5 million, and $4 million in 2019, 2018, and 2017, respectively, to settle SARs. At December 31, 2019, there were no outstanding SARs.
Information related to phantom stock awards and SARs was as follows, in millions:
 
Phantom Stock Awards
 
Stock Appreciation Rights
 
At December 31,
 
At December 31,
 
2019
 
2018
 
2019
 
2018
Accrued compensation cost liability
$
5

 
$
4

 
$
—

 
$
2

Unrecognized compensation cost
$
3

 
$
2

 
$
—

 
$
—

Equivalent common shares
—

 
—

 
—

 
—