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SHAREHOLDERS' EQUITY (Tables)
 12 Months Ended
Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Options Fair Value Assumptions

The fair value of stock options is determined using the Black-Scholes model. The weighted-average assumptions used in estimating the fair value of stock options granted during each year, along with the weighted-average grant-date fair values, were as follows:

 

 

years ended December 31

 

2017

 

 

2016

 

 

2015

 

Expected volatility

 

 

19

%

 

 

20

%

 

 

20

%

Expected life (in years)

 

 

5.5

 

 

 

5.5

 

 

 

5.5

 

Risk-free interest rate

 

 

2.1

%

 

 

1.4

%

 

 

1.7

%

Dividend yield

 

 

1.0

%

 

 

1.2

%

 

 

2.9

%

Fair value per stock option

 

$

10

 

 

$

7

 

 

$

9

 

 
Summary of Stock Option Activity

The following table summarizes stock option activity for the year ended December 31, 2017 and the outstanding stock options as of December 31, 2017.

 

 

(options and aggregate intrinsic values in thousands)

 

Options

 

 

Weighted-

average

exercise

price

 

 

Weighted-

average

remaining

contractual

term

(in years)

 

 

Aggregate

intrinsic

value

 

Outstanding as of January 1, 2017

 

 

33,076

 

 

$

35.73

 

 

 

 

 

 

 

 

 

Granted

 

 

5,822

 

 

$

51.42

 

 

 

 

 

 

 

 

 

Exercised

 

 

(9,031

)

 

$

33.80

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(1,605

)

 

$

41.81

 

 

 

 

 

 

 

 

 

Expired

 

 

(54

)

 

$

34.25

 

 

 

 

 

 

 

 

 

Outstanding as of December 31, 2017

 

 

28,208

 

 

$

39.25

 

 

 

6.2

 

 

$

715,900

 

Vested or expected to vest as of December 31, 2017

 

 

27,712

 

 

$

39.07

 

 

 

6.1

 

 

$

708,533

 

Exercisable as of December 31, 2017

 

 

16,364

 

 

$

35.51

 

 

 

4.8

 

 

$

476,756

 

 
Summary of Stock Option Activity

The following table summarizes nonvested RSU activity for the year ended December 31, 2017.

 

  

(share units in thousands)

 

Share units

 

 

Weighted-

average

grant-date

fair value

 

Nonvested RSUs as of January 1, 2017

 

 

2,698

 

 

$

32.90

 

Granted

 

 

1,145

 

 

$

55.11

 

Vested

 

 

(1,355

)

 

$

29.84

 

Forfeited

 

 

(287

)

 

$

38.41

 

Nonvested RSUs as of December 31, 2017

 

 

2,201

 

 

$

45.65

 

 
Performance Stock Units Fair Value

The assumptions used in estimating the fair value of these PSUs granted during the period, along with the grant-date fair values, were as follows:

 

years ended December 31

 

2017

 

 

2016

 

 

2015

 

Baxter volatility

 

 

19%

 

 

 

20%

 

 

 

19%

 

Peer group volatility

 

16%-54%

 

 

17%-51%

 

 

16%-38%

 

Correlation of returns

 

0.19-0.58

 

 

0.22-0.73

 

 

0.24-0.55

 

Risk-free interest rate

 

 

1.6%

 

 

 

1.0%

 

 

 

1.1%

 

Fair value per PSU

 

$

69

 

 

$

51

 

 

$

46

 

 
Summary of Nonvested Performance Stock Unit Activity

The following table summarizes nonvested PSU activity for the year ended December 31, 2017.

  

(share units in thousands)

 

Share units

 

 

Weighted-

average

grant-date

fair value

 

Nonvested PSUs as of January 1, 2017

 

 

278

 

 

$

46.82

 

Granted

 

 

461

 

 

$

62.22

 

Vested

 

 

(194

)

 

$

34.35

 

Forfeited

 

 

(85

)

 

$

52.31

 

Nonvested PSUs as of December 31, 2017

 

 

460

 

 

$

66.50