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STOCK INCENTIVE PLANS | 12 Months Ended
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Dec. 31, 2018
STOCK INCENTIVE PLANS [Abstract] |
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS The Company maintains stock incentive plans under which the Company may grant a variety of incentive awards to employees and executives, which include restricted stock units (RSUs), non-qualified stock options, performance shares and deferred stock units. As of December 31, 2018, there were 2.5 million shares available for grant under the plans. When awards are exercised or settled, shares of the Company’s treasury stock are issued. Pretax stock-based compensation expense, included in SG&A was $47 million, $33 million and $36 million in 2018, 2017 and 2016, respectively and was primarily comprised of Restricted Stock Units (RSUs) and option grants. Related income tax benefits recognized in earnings were $26 million, $26 million and $12 million in 2018, 2017 and 2016, respectively. Restricted Stock Units The Company awards RSUs to certain employees and executives. RSUs granted vest generally over periods from three to seven years from issuance, although accelerated vesting is provided in certain instances. Holders of RSUs are entitled to receive nonforfeitable cash payments equivalent to cash dividends and other distributions paid with respect to common stock. RSUs are settled by the issuance of the Company's common stock on a one-for-one basis. Compensation expense related to RSUs is based upon the closing market price on the last trading day preceding the date of award and is charged to earnings on a straight-line basis over the vesting period. The following table summarizes RSU activity (in millions, except for share and per share amounts):
| 2018 |  | 2017 |  | 2016
| Shares | Weighted Average Price Per Share |  | Shares | Weighted Average Price Per Share |  | Shares | Weighted Average Price Per Share
Beginning nonvested units | 352,919 |  | $ | 226.31 |  |  | 373,403 |  | $ | 221.77 |  |  | 432,783 |  | $ | 213.45 |
Issued | 141,775 |  | $ | 284.98 |  |  | 129,378 |  | $ | 222.53 |  |  | 113,909 |  | $ | 230.36 |
Canceled | (56,393 | ) | $ | 245.08 |  |  | (47,488 | ) | $ | 229.36 |  |  | (62,869 | ) | $ | 229.70 |
Vested | (94,487 | ) | $ | 233.75 |  |  | (102,374 | ) | $ | 203.51 |  |  | (110,420 | ) | $ | 193.51 |
Ending nonvested units | 343,814 |  | $ | 245.38 |  |  | 352,919 |  | $ | 226.31 |  |  | 373,403 |  | $ | 221.77 |
Fair value of shares vested | $22 |  |  | $21 |  |  | $21 |
At December 31, 2018 there was $51 million of total unrecognized compensation expense related to nonvested RSUs that the Company expects to recognize over a weighted average period of 3.0 years. Stock Options The Company issues stock option grants to certain employees and executives. Option awards are granted with an exercise price equal to the closing market price of the Company's stock on the day of the grant. The options generally vest over three years, although accelerated vesting is provided in certain circumstances. Awards generally expire 10 years from the grant date. Transactions involving stock options are summarized as follows:
| Shares Subject to Option |  | Weighted Average Price Per Share |  | Options Exercisable
Outstanding at January 1, 2016 | 2,226,286 |  |  | $ | 169.96 |  |  | 1,411,460 |
Granted | 294,874 |  |  | $ | 234.25 |  |  |  |
Exercised | (317,110 | ) |  | $ | 108.28 |  |  |  |
Canceled or expired | (80,014 | ) |  | $ | 210.01 |  |  |  |
Outstanding at December 31, 2016 | 2,124,036 |  |  | $ | 186.59 |  |  | 1,346,707 |
Granted | 306,206 |  |  | $ | 230.97 |  |  |  |
Exercised | (409,269 | ) |  | $ | 115.35 |  |  |  |
Canceled or expired | (87,260 | ) |  | $ | 222.00 |  |  |  |
Outstanding at December 31, 2017 | 1,933,713 |  |  | $ | 207.10 |  |  | 1,375,844 |
Granted | 204,250 |  |  | $ | 276.64 |  |  |  |
Exercised | (931,929 | ) |  | $ | 193.68 |  |  |  |
Canceled or expired | (72,931 | ) |  | $ | 226.48 |  |  |  |
Outstanding at December 31, 2018 | 1,133,103 |  |  | $ | 229.42 |  |  | 581,534 |
At December 31, 2018 there was $9 million of total unrecognized compensation expense related to nonvested option awards, which the Company expects to recognize over a weighted average period of 1.9 years. The following table summarizes information about stock options (in millions of dollars):
|  | For the years ended December 31,
|  | 2018 |  | 2017 |  | 2016
Fair value of options exercised |  | $ | 38 |  |  | $ | 11 |  |  | $ | 8 |
Total intrinsic value of options exercised |  | 102 |  |  | 47 |  |  | 36 |
Fair value of options vested |  | 8 |  |  | 24 |  |  | 15 |
Settlements of options exercised |  | 180 |  |  | 47 |  |  | 35 |
Information about stock options outstanding and exercisable as of December 31, 2018, is as follows:
|  | Options Outstanding |  | Options Exercisable
|  |  |  | Weighted Average |  |  |  |  | Weighted Average |
Range of Exercise Prices |  | Number |  | Remaining Contractual Life |  | Exercise Price |  | Intrinsic Value (millions) |  | Number |  | Remaining Contractual Life |  | Exercise Price |  | Intrinsic Value (millions)
$72.14 - $204.01 |  | 184,435 |  |  | 2.23 years |  | $ | 152.28 |  |  | $ | 24 |  |  | 183,292 |  |  | 2.19 years |  | $ | 152.17 |  |  | $ | 24 |
$223.68 - $276.64 |  | 948,668 |  |  | 7.37 years |  | $ | 244.42 |  |  | 36 |  |  | 398,242 |  |  | 6.10 years |  | $ | 238.88 |  |  | 17 |
|  | 1,133,103 |  |  | 6.54 years |  | $ | 229.42 |  |  | $ | 60 |  |  | 581,534 |  |  | 4.87 years |  | $ | 211.55 |  |  | $ | 41 |
The Company uses a binomial lattice option pricing model for the valuation of stock options. The weighted average fair value of options granted in 2018, 2017 and 2016 was $67.31, $45.09 and $44.94, respectively. The fair value of options granted in 2018, 2017 and 2016 used the following assumptions:
|  | For the years ended December 31,
|  | 2018 |  | 2017 |  | 2016
Risk-free interest rate |  | 2.6% |  | 2.0% |  | 1.4%
Expected life |  | 6 years |  | 6 years |  | 6 years
Expected volatility |  | 27.5% |  | 23.9% |  | 24.5%
Expected dividend yield |  | 1.9% |  | 2.1% |  | 2.0%
The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term approximately equal to the expected term of the options being valued. The expected life selected for options granted during each year presented represents the period of time that the options are expected to be outstanding based on historical data of option holder exercise and termination behavior. Expected volatility is based upon implied and historical volatility of the Company's closing stock price over a period equal to the expected life of each option grant. Historical Company information is the primary basis for selection of expected dividend yield assumptions.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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