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STOCK-BASED EMPLOYEE COMPENSATION | 9 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
STOCK-BASED EMPLOYEE COMPENSATION | STOCK-BASED EMPLOYEE COMPENSATION Stock-based compensation expense related to performance share units, restricted stock units and stock options is recognized based on fair value on a straight-line basis over the respective requisite service periods 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. For performance share units with market conditions, the effect of the market condition is also considered in the determination of fair value on the grant date using Monte Carlo simulations. The fair value of employee stock options is determined using the Black-Scholes model. Performance share units and restricted stock units are payable in shares of the Company's common stock upon vesting. The Company issues shares of its common stock upon the exercise of stock options. The Company records stock-based compensation expense for performance-based awards using its estimate of the probable outcome at the end of the performance period (i.e., the estimated performance against the performance targets or performance goals, as applicable). The Company periodically adjusts the cumulative stock-based compensation expense recorded when the probable outcome for these performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable. Due to the impact of the COVID-19 pandemic (see Note 1), there was a significant decline, as of March 31, 2020, in the estimated performance over the performance periods against the performance targets and consequently, a significant reduction in the number of shares that were probable to be issued as compared to December 31, 2019. As a result, for the three months ended March 31, 2020, the Company recognized a reduction in stock-based compensation expense of $73 million, which is included in "Personnel" expense in the Unaudited Consolidated Statement of Operations for the nine months ended September 30, 2020. During the three months ended June 30, 2020, considering pre-COVID-19 performance and the significant effect of the COVID-19 pandemic on Company performance and consequently on the number of shares that were probable to be issued to employees, the Company modified the performance-based awards granted in 2018 (other than the performance-based awards granted to executive officers and certain other employees) to fix the number of shares to be issued, subject to other vesting conditions. As a result, the Company incurred additional stock-based compensation expense of $11 million, which was recognized over the remaining requisite service period. During the three months ended March 31, 2021, the Company modified the performance-based awards granted in 2018 and 2019 to its executive officers, to fix the number of shares to be issued, subject to other vesting conditions. The modification, in the aggregate, resulted in additional stock-based compensation expense of $40 million, to be recognized over the remaining requisite service periods for the performance-based awards. Restricted stock units and performance share units granted by the Company during the three and nine months ended September 30, 2021 had an aggregate grant-date fair value of $22 million and $400 million, respectively. Restricted stock units and performance share units that vested during the three and nine months ended September 30, 2021 had an aggregate fair value at vesting of $8 million and $385 million, respectively. At September 30, 2021, there was $520 million of estimated total future stock-based compensation expense related to unvested restricted stock units and performance share units to be recognized over a weighted-average period of 2.0 years. At September 30, 2021, there was $33 million of estimated total future stock-based compensation expense related to unvested stock options to be recognized over a weighted-average period of 1.4 years. Restricted Stock Units The Company makes broad-based grants of restricted stock units that generally vest during a period of one- to three-years, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. The following table summarizes the activity of restricted stock units for employees and non-employee directors during the nine months ended September 30, 2021:
Restricted Stock Units |  | Shares |  | Weighted-average Grant-date Fair Value
Unvested at December 31, 2020 |  | 305,959 |  |  |  | $ | 1,697 |  |
Granted |  | 133,667 |  |  |  | $ | 2,270 |  |
Vested |  | (114,486) |  |  |  | $ | 1,793 |  |
Forfeited |  | (39,382) |  |  |  | $ | 1,882 |  |
Unvested at September 30, 2021 |  | 285,758 |  |  |  | $ | 1,901 |  |
Performance Share Units The Company grants performance share units to executives and certain other employees, which generally vest at the end of a three-year period (with the exception of certain shorter term performance share units granted in 2021 that vest at the end of one and two years), subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. The number of shares that ultimately vest depends on achieving certain performance metrics, performance goals, stock price increase and/or relative total shareholder return, as applicable, by the end of the performance period, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances. The following table summarizes the activity of performance share units for employees during the nine months ended September 30, 2021:
Performance Share Units |  | Shares | Weighted-average Grant-date Fair Value
Unvested at December 31, 2020 |  | 84,478 |  |  | $ | 1,930 |  |
Granted (1) |  | 42,173 |  |  | $ | 2,287 |  |
Vested |  | (55,426) |  |  | $ | 1,999 |  |
Performance shares adjustment (2) |  | 44,346 |  |  | $ | 2,125 |  |
Forfeited |  | (7,248) |  |  | $ | 1,792 |  |
Unvested at September 30, 2021 |  | 108,323 |  |  | $ | 2,123 |  |
(1) Excludes 12,251 performance share units awarded during the nine months ended September 30, 2021 for which the grant date under ASC 718, Compensation - Stock Compensation, has not yet been established. Among other conditions, for the grant date to be established, a mutual understanding is required to be reached between the Company and the employee of the key terms and conditions of the award, including the performance targets. The performance targets for each of the annual performance periods under the award are set at the beginning of the respective year. (2) Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications. The following table summarizes the estimated vesting, as of September 30, 2021, of performance share units granted in 2021, 2020 and 2019, net of forfeiture and vesting since the respective grant dates:
Performance Share Units, by grant year |  | 2021(1) |  | 2020 |  | 2019
Shares probable to be issued |  | 63,523 |  |  | 11,752 |  |  | 33,048 |
Shares not subject to the achievement of minimum performance thresholds |  | 28,198 |  |  | — |  |  | 33,048 |
Shares that could be issued if maximum performance thresholds are met |  | 63,523 |  |  | 18,080 |  |  | 61,669 |
(1) Excludes performance share units awarded during the nine months ended September 30, 2021 for which the grant date under ASC 718 has not yet been established as disclosed above. Stock Options In 2020, the Company granted stock options to certain employees that vest in March 2023, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. No stock options were granted to the executive officers of the Company. Stock options granted or assumed in acquisitions generally have a term of 10 years from the grant date. The following table summarizes the activity for stock options during the nine months ended September 30, 2021:
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, 2020 |  | 152,746 |  |  |  | $ | 1,401 |  |  |  | $ | 126 |  |  | 9.3
Exercised |  | (3,592) |  |  |  | $ | 1,226 |  |  |  |  |  |
Forfeited |  |  | (12,846) |  |  |  | $ | 1,411 |  |  |  |  |  |
Balance, September 30, 2021 |  | 136,308 |  |  |  | $ | 1,405 |  |  |  | $ | 132 |  |  | 8.5
Exercisable at September 30, 2021 |  | 1,293 |  |  |  | $ | 789 |  |  |  | $ | 2 |  |  | 1.9
The aggregate intrinsic value of employee stock options exercised during the nine months ended September 30, 2021 and 2020 was $4 million and $14 million, respectively.

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