Annual report [Section 13 and 15(d), not S-K Item 405]

Share-Based Compensation (Tables)

v3.25.4
Share-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Schedule of Share-based Compensation Expense, Net
Total share-based compensation costs, net of forfeitures, consisted of the following (in millions):
Year Ended December 31,
2025 2024 2023
Share-based compensation costs before income taxes:
Equity awards $ 121  $ 121  $ 100 
Liability awards 48  101  155 
Total share-based compensation 169  222  255 
Capitalized share-based compensation (8) (7) (5)
Total share-based compensation expense before income taxes $ 161  $ 215  $ 250 
Tax benefit associated with share-based compensation costs $ 44  $ 46  $ 54 
Schedule of Nonvested Share Activity
The table below provides a summary of activity related to our RSUs and PSUs (in millions, except for per unit information):
Restricted Stock Units Performance Stock Units
Equity Awards Liability Awards Equity Awards Liability Awards
  Units Weighted Average Grant Date Fair Value Per Unit Units Weighted Average Grant Date Fair Value Per Unit Units Weighted Average Grant Date Fair Value Per Unit Units Weighted Average Grant Date Fair Value Per Unit
Non-vested at January 1, 2025
 1.3  $ 149.52  0.2  $ 214.87  0.4  $ 153.07  0.5  $ 298.22 
Granted (1) 0.6  220.62  0.0  194.39  0.1  246.04  —  — 
Incremental units achieved (2) —  —  —  —  0.1  171.01  —  — 
Forfeited (0.1) 183.41  —  —  —  —  —  — 
Reclassifications (3) 0.0  156.26  0.0  200.77  (0.2) 176.25  0.2  226.72 
Vested (4) (0.7) 143.97  (0.1) 223.29  (0.1) 115.84  (0.3) 314.57 
Non-vested at December 31, 2025
 1.1  $ 189.87  0.1  $ 194.39  0.3  $ 188.17  0.4  $ 224.20 
(1)The Equity Awards column for PSUs includes 0.1 million PSUs granted in 2025 to certain officers containing a cash settlement cap of $3 million.
(2)Represents incremental units recognized as a result of final performance measures or changes in estimated measures. As of December 31, 2025, there were 0.1 million PSUs that would be issued if the maximum level of performance under the target awards amount is achieved.
(3)During the years ended December 31, 2025, 2024 and 2023, we recognized $5 million, $14 million and $86 million, respectively, in incremental expense as a result of significant modifications involving reclassification between equity awards and liability awards, attributable to six, seven and six employees, respectively.
(4)The total fair value of RSUs and PSUs vested was $175 million and $107 million, respectively, for the year ended December 31, 2025.
Schedule Of Share Based-Payment Award, Performance Stock Units, Valuation Assumptions
The table below provides the assumptions used in estimating the fair value of unvested awards containing market conditions as of the end of the respective periods, and for which the performance period had not yet ended:
Year Ended December 31,
2025 2024 2023
Fair value assumptions:
Dividend yield (1) —  % —  % —  %
Expected volatility (2)(3)
26.5% - 30.1%
21.5% - 24.3%
27.5% - 32.7%
Weighted average expected volatility 28.5  % 22.9  % 29.9  %
Risk-free interest rate (2)
3.5%
4.2% - 4.3%
4.2% - 4.8%
Weighted average expected remaining term, in years 1.4 1.5 1.5
(1)The performance stock units are entitled to dividend equivalents during the performance period. Therefore, when calculating simulated returns, we applied an annual dividend yield of zero percent.
(2)Represents the range associated with individual vesting years. As of December 31, 2025, the risk-free interest rate is consistent across the individual vesting years and as such, no range is presented.
(3)The expected volatility is based on historical and implied volatilities of our common stock price.