Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2013

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense
	Years ended December 31
(Millions)	2013		2012		2011
Cost of sales	$	27	$	27	$	29
Selling, general and administrative expenses		183		167		192
Research, development and related expenses		30		29		32
Stock-based compensation expenses	$	240	$	223	$	253
Income tax benefits	$	(71)	$	(67)	$	(80)
Stock-based compensation expenses, net of tax	$	169	$	156	$	173

Stock Option Activity

Stock Option Program
The following table summarizes stock option activity for the years ended December 31:
			2013			2012			2011
			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		56,565,030	$	80.33	64,148,415	$	77.28	70,335,044	$	74.80
	Granted:
		Annual	6,220,810		101.55	5,770,190		87.91	5,514,500		89.46
		Progressive (Reload)	140,447		109.83	110,065		89.65	237,839		94.02
		Other	191		119.62	51,661		89.25	8,953		86.71
	Exercised		(18,825,218)		79.25	(13,123,617)		68.78	(11,625,863)		68.47
	Canceled		(162,482)		89.92	(391,684)		83.65	(322,058)		75.09
	December 31		43,938,778	$	83.84	56,565,030	$	80.33	64,148,415	$	77.28
Options exercisable
	December 31		32,038,228	$	79.58	45,207,143	$	78.78	52,644,364	$	76.90

Stock Option Assumptions

Stock Option Assumptions
	Annual									Progressive (Reload)
	2013			2012			2011			2013			2012			2011
Exercise price	$	101.49		$	87.89		$	89.47		$	109.84		$	87.89		$	93.94
Risk-free interest rate		1.2	%		1.1	%		2.8	%		0.2	%		0.2	%		0.4	%
Dividend yield		2.7	%		2.6	%		2.6	%		2.7	%		2.6	%		2.6	%
Volatility		20.0	%		24.5	%		22.0	%		16.3	%		23.4	%		21.5	%
Expected life (months)		75			74			72			12			19			15
Black-Scholes fair value	$	13.46		$	14.94		$	16.10		$	6.42		$	8.50		$	7.49

Restricted Stock Units and Restricted Stock Activity

Restricted Stock and Restricted Stock Units
The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:
				2013			2012			2011
					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			3,261,562	$	85.17	4,858,972	$	73.02	4,812,657	$	68.75
		Granted
			Annual	946,774		101.57	968,522		87.92	889,448		89.46
			Other	44,401		111.19	99,337		85.07	351,624		87.07
		Vested		(1,100,095)		79.93	(2,594,468)		63.51	(1,077,816)		72.21
		Forfeited		(47,281)		90.82	(70,801)		82.65	(116,941)		72.01
	As of December 31			3,105,361	$	92.31	3,261,562	$	85.17	4,858,972	$	73.02

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:
			2013			2012			2011
				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		1,089,084	$	79.27	878,872	$	78.55	760,645	$	73.99
		Granted	353,734		96.87	467,531		81.55	415,024		84.58
		Distributed	(507,083)		75.16	―		―	(206,410)		72.77
		Performance change	(6,949)		77.01	(178,838)		81.27	(39,323)		82.10
		Forfeited	(33,151)		91.34	(78,481)		80.21	(51,064)		80.20
	As of December 31		895,635	$	88.12	1,089,084	$	79.27	878,872	$	78.55

General Employees' Stock Purchase Plan (GESPP)

General Employees' Stock Purchase Plan
		2013			2012			2011
			Weighted			Weighted			Weighted
			Average			Average			Average
		Shares	Exercise Price		Shares	Exercise Price		Shares	Exercise Price
Options granted		1,259,247	$	93.46	1,455,545	$	75.32	1,433,609	$	73.67
Options exercised		(1,259,247)		93.46	(1,455,545)		75.32	(1,433,609)		73.67
Shares available for grant -
	December 31	30,185,960			31,445,207			2,900,751