Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense
	Years ended December 31
(Millions)	2012		2011		2010
Cost of sales	$	27	$	29	$	31
Selling, general and administrative expenses		167		192		209
Research, development and related expenses		29		32		34
Stock-based compensation expenses	$	223	$	253	$	274
Income tax benefits	$	(67)	$	(80)	$	(98)
Stock-based compensation expenses, net of tax	$	156	$	173	$	176

Stock Option Activity

The following table summarizes stock option activity during the twelve months ended December 31:
Stock Option Program
			2012			2011			2010
			Number of Options	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
Under option —
	January 1		64,148,415	$	77.28	70,335,044	$	74.80	74,268,165	$	72.39
	Granted:
		Annual	5,770,190		87.91	5,514,500		89.46	5,788,313		78.79
		Progressive (Reload)	110,065		89.65	237,839		94.02	188,105		88.67
		Other	51,661		89.25	8,953		86.71	27,911		82.13
	Exercised		(13,123,617)		68.78	(11,625,863)		68.47	(9,678,654)		59.11
	Canceled		(391,684)		83.65	(322,058)		75.09	(258,796)		70.76
	December 31		56,565,030	$	80.33	64,148,415	$	77.28	70,335,044	$	74.80
Options exercisable
	December 31		45,207,143	$	78.78	52,644,364	$	76.90	58,201,617	$	75.87

Stock Option Assumptions

Stock Option Assumptions
	Annual									Progressive (Reload)
	2012			2011			2010			2012			2011			2010
Exercise price	$	87.89		$	89.47		$	78.72		$	87.89		$	93.94		$	86.72
Risk-free interest rate		1.1	%		2.8	%		2.8	%		0.2	%		0.4	%		0.6	%
Dividend yield		2.6	%		2.6	%		2.5	%		2.6	%		2.6	%		2.5	%
Volatility		24.5	%		22.0	%		25.7	%		23.4	%		21.5	%		33.2	%
Expected life (months)		74			72			72			19			15			17
Black-Scholes fair value	$	14.94		$	16.10		$	16.50		$	8.50		$	7.49		$	12.01

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units
				2012			2011			2010
					Weighted Average			Weighted Average			Weighted Average
				Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
				Awards	Fair Value		Awards	Fair Value		Awards	Fair Value
Nonvested balance —
	As of January 1			4,858,972	$	73.02	4,812,657	$	68.75	4,379,480	$	68.85
		Granted
			Annual	968,522		87.92	889,448		89.46	902,549		78.81
			Other	99,337		85.07	351,624		87.07	527,823		70.09
		Vested		(2,594,468)		63.51	(1,077,816)		72.21	(948,233)		79.12
		Forfeited		(70,801)		82.65	(116,941)		72.01	(48,962)		76.22
	As of December 31			3,261,562	$	85.17	4,858,972	$	73.02	4,812,657	$	68.75

Performance Shares Activity

			2012			2011			2010
				Weighted Average			Weighted Average			Weighted Average
			Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
			Awards	Fair Value		Awards	Fair Value		Awards	Fair Value
Undistributed balance —
	As of January 1		878,872	$	78.55	760,645	$	73.99	―	$	―
		Granted	467,531		81.55	415,024		84.58	370,575		74.46
		Distributed	―		―	(206,410)		72.77	―		―
		Performance change	(178,838)		81.27	(39,323)		82.10	396,390		73.55
		Forfeited	(78,481)		80.21	(51,064)		80.20	(6,320)		73.92
	As of December 31		1,089,084	$	79.27	878,872	$	78.55	760,645	$	73.99

General Employees' Stock Purchase Plan (GESPP)

General Employees' Stock Purchase Plan
		2012			2011			2010
			Weighted			Weighted			Weighted
			Average			Average			Average
		Shares	Exercise Price		Shares	Exercise Price		Shares	Exercise Price
Options granted		1,455,545	$	75.32	1,433,609	$	73.67	1,325,579	$	70.57
Options exercised		(1,455,545)		75.32	(1,433,609)		73.67	(1,325,579)		70.57
Shares available for grant -
	December 31	31,445,207			2,900,751			4,334,360