v3.8.0.1
Stock Incentive Plans
 12 Months Ended
Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Incentive Plans
Stock Incentive Plans
 
The Company's stock incentive plans allow for the granting of restricted stock or restricted stock unit awards and options to purchase common stock. Both incentive stock options and nonqualified stock options can be awarded under the plans. No option will be exercisable for longer than ten years after the date of grant. The plans have 6,586 thousand shares available for future awards. Compensation expense for stock options and restricted stock unit awards is recognized on a straight-line basis over the vesting period, generally three to five years for stock options and one to three years for restricted stock or restricted stock unit awards. Certain restricted stock unit awards contain performance-based as well as service-based provisions. Certain awards provide for accelerated vesting if there is a change in control as defined in the plans. In addition, the Company incorporated retirement provisions in our stock-based compensation agreements beginning in 2016. The total compensation cost that has been charged against income for the stock incentive plans was $135 million, $148 million and $71 million for the years ended December 31, 2017, 2016 and 2015, respectively. The total income tax benefit recognized in the income statement for stock-based compensation arrangements was $50 million, $67 million and $24 million for the years ended December 31, 2017, 2016 and 2015, respectively.
 
Option activity for the year ended December 31, 2017 is summarized below (shares in thousands):
 
Shares
 
Weighted Average Exercise Price
 
Aggregate Intrinsic Value
($ in millions)
 
Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2016
320

 
$
17.44

 
 
 
 
Granted
1

 
68.60

 
 
 
 
Exercised
(178
)
 
13.47

 
 
 
 
Forfeited
(13
)
 
62.86

 
 
 
 
Outstanding as of December 31, 2017
130

 
$
18.82

 
$
11

 
2.7
 
 
 
 
 
 
 
 
Exercisable as of December 31, 2017
115

 
$
13.75

 
$
10

 
1.9


The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 
Year Ended December 31,
 
2017
 
2016
 
2015 (1)
Expected life (in years)
4.8
 
4.8
 
—
Risk-free interest rate
1.9%
 
1.6%
 
—
Expected volatility
37.5%
 
39.0%
 
—
Expected dividend yield
—
 
—
 
—
 
 
 
 
 
 
(1) No options were awarded in the year ended December 31, 2015.


For options granted in the year ended December 31, 2017, the Company used a projected expected life for each award granted based on historical experience of employees' exercise behavior. The expected volatility is primarily based on historical volatility levels. The risk-free interest rates are based on the implied yield currently available on U.S. Treasury instruments with a remaining term equal to the expected life.

Other information pertaining to option activity is as follows:
 
Year Ended December 31,
 
2017
 
2016
 
2015 (1)
Weighted-average fair value of options granted
$
68.60

 
$
59.94

 
$
—

Total intrinsic value of stock options exercised ($ in millions)
$
12

 
$
19

 
$
28

 
 
 
 
 
 
(1) No options were awarded in the year ended December 31, 2015.


A summary of the Company's non-vested restricted stock and restricted stock unit shares as of December 31, 2017, and changes during the year ended December 31, 2017, is presented below (shares in thousands):
 
Shares
 
Weighted Average Grant Date Fair Value
Non-vested balance as of December 31, 2016
4,790

 
$
55.75

Granted
1,412

 
95.13

Vested
(1,883
)
 
58.10

Forfeited
(150
)
 
20.40

Non-vested balance as of December 31, 2017
4,169

 
$
69.30

 
 
 
 


The total fair value of restricted stock and restricted stock units vested during the years ended December 31, 2017, 2016 and 2015, was $174 million, $147 million and $112 million, respectively.

As of December 31, 2017, there was $254 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans; that cost is expected to be recognized over a weighted-average period of 2.2 years.

The Company maintains an employee stock purchase plan and issued 129 thousand shares, 118 thousand shares, and 87 thousand shares in 2017, 2016 and 2015, respectively.