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Stock Incentive Plans (Tables) | 12 Months Ended
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Dec. 31, 2017
Stock Incentive Plans |
Schedule of share-based compensation, activity | The following table is a summary of stock-based compensation for each of the respective periods:
In millions |  | 2017 |  | 2016 |  | 2015
Stock options (1) |  | $ | 65 |  | $ | 79 |  | $ | 90
Restricted stock awards (2) |  |  | 169 |  |  | 143 |  |  | 140
Total stock-based compensation |  | $ | 234 |  | $ | 222 |  | $ | 230
| (1) |  | Includes the Employee Stock Purchase Plan (the “ESPP”)
| (2) |  | Stock-based compensation for the year ended December 31, 2015 includes $38 million associated with accelerated vesting of restricted stock replacement awards issued to Omnicare executives who were terminated subsequent to the acquisition.
Summary of the assumptions used to value the ESPP awards | The following table is a summary of the assumptions used to value the ESPP awards for each of the respective periods:
|  | 2017 |  | 2016 |  | 2015
Dividend yield (1) |  |  | 1.24 | % |  |  | 0.88 | % |  |  | 0.71 | %
Expected volatility (2) |  |  | 22.70 | % |  |  | 20.64 | % |  |  | 13.92 | %
Risk-free interest rate (3) |  |  | 0.86 | % |  |  | 0.45 | % |  |  | 0.11 | %
Expected life (in years) (4) |  |  | 0.5 |  |  |  | 0.5 |  |  |  | 0.5 |
Weighted-average grant date fair value |  | $ | 13.01 |  |  | $ | 14.98 |  |  | $ | 18.72 |
| (1) |  | The dividend yield is calculated based on semi-annual dividends paid and the fair market value of the Company’s stock at the grant date.
| (2) |  | The expected volatility is based on the historical volatility of the Company’s daily stock market prices over the previous six month period.
| (3) |  | The risk-free interest rate is based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP options (i.e., six months).
| (4) |  | The expected life is based on the semi-annual purchase period.
Summary of the restricted stock unit and restricted share award activity | The following table is a summary of the restricted stock unit and restricted share award activity for the year ended December 31, 2017.
|  |  |  | Weighted Average
|  |  |  | Grant Date
Units in thousands |  | Units |  | Fair Value
Nonvested at beginning of year |  | 4,876 |  | $ | 55.56
Granted |  | 2,873 |  | $ | 78.35
Vested |  | (2,340) |  | $ | 78.92
Forfeited |  | (395) |  | $ | 89.21
Nonvested at end of year |  | 5,014 |  | $ | 86.92
Black-Scholes option pricing model, assumptions | The fair value of each stock option is estimated using the Black-Scholes option pricing model based on the following assumptions at the time of grant:
|  | 2017 |  | 2016 |  | 2015
Dividend yield (1) |  |  | 2.56 | % |  |  | 1.62 | % |  |  | 1.37 | %
Expected volatility (2) |  |  | 18.39 | % |  |  | 17.22 | % |  |  | 18.07 | %
Risk-free interest rate (3) |  |  | 1.77 | % |  |  | 1.24 | % |  |  | 1.24 | %
Expected life (in years) (4) |  |  | 4.1 |  |  |  | 4.2 |  |  |  | 4.2 |
Weighted-average grant date fair value |  | $ | 9.43 |  |  | $ | 13.00 |  |  | $ | 14.01 |
| (1) |  | The dividend yield is based on annual dividends paid and the fair market value of the Company’s stock at the grant date.
| (2) |  | The expected volatility is estimated using the Company’s historical volatility over a period equal to the expected life of each option grant after adjustments for infrequent events such as stock splits.
| (3) |  | The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options being valued.
| (4) |  | The expected life represents the number of years the options are expected to be outstanding from grant date based on historical option holder exercise experience.
Summary of the Company's stock option activity | The following table is a summary of the Company’s stock option activity for the year ended December 31, 2017:
|  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  | Aggregate
|  |  |  | Average |  | Contractual |  | Intrinsic
Shares in thousands |  | Shares |  | Exercise Price |  | Term |  | Value
Outstanding at December 31, 2016 |  | 23,275 |  | $ | 68.60 |  |  |  |  |
Granted |  | 3,513 |  | $ | 78.05 |  |  |  |  |
Exercised |  | (4,814) |  | $ | 43.07 |  |  |  |  |
Forfeited |  | (889) |  | $ | 94.25 |  |  |  |  |
Expired |  | (555) |  | $ | 60.00 |  |  |  |  |
Outstanding at December 31, 2017 |  | 20,530 |  | $ | 75.32 |  | 3.62 |  | $ | 180,318,054
Exercisable at December 31, 2017 |  | 11,365 |  | $ | 61.37 |  | 2.30 |  | $ | 179,628,690
Vested at December 31, 2017 and expected to vest in the future |  | 20,114 |  | $ | 75.00 |  | 3.57 |  | $ | 180,299,134

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