Share-based compensation (Tables)

3 Months Ended

Mar. 31, 2026

The assumptions used in the Monte Carlo simulations for the rTSR granted in 2026 were as follows:


	Three months ended
	March 31,
rTSR Fair value assumptions:	2026
Expected annualized volatility	29.48	%
Risk free interest rate	3.75	%
Simulation period	2.8 years
Grant date fair value of rTSR awards	$237.16

The assumptions used in the Black-Scholes option-pricing model in 2026 were as follows:


	Three months ended
	March 31,
Stock option fair value assumptions used:	2026
Expected annualized volatility	32.14	%
Dividend yield	1.54	%
Risk free interest rate	3.89	%
Expected term	6 years
Grant date fair value of stock option awards	$75.22

The following table summarizes the share-based incentive awards activity for the three months ended March 31, 2026:


	Number of shares	Weighted average grant date fair value
Outstanding as of December 31, 2025	712,184	$191.67
RSU awards granted	234,808	219.73

PSU-EX granted	89,457	225.54

Share adjustments based on performance	(21,836)	255.62
Vested	(2,860)	169.26
Forfeited	(6,492)	198.34
Outstanding as of March 31, 2026	1,005,261	$199.74

Stock option activity in 2026 is summarized in the following table:


	Number of shares	Weighted average exercise price per share	Aggregate intrinsic value (in millions)	Weighted average remaining contractual life (years)
Outstanding as of December 31, 2025	83,316	$211.52
Granted	61,416	231.63


Outstanding as of March 31, 2026	144,732	$220.06	$2	9.3
Exercisable as of March 31, 2026	19,793	$201.38	$1	8.5

The following table relates to all share-based compensation awards:


	Three months ended
	March 31,
(In millions)	2026	2025
Share-based compensation expense (within SG&A)	$15	$9
Income tax benefit	4	2