Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense
	Years ended December 31
(Millions)	2014		2013		2012
Cost of sales	$	47	$	27	$	27
Selling, general and administrative expenses		192		183		167
Research, development and related expenses		41		30		29
Stock-based compensation expenses	$	280	$	240	$	223
Income tax benefits	$	(79)	$	(71)	$	(67)
Stock-based compensation expenses, net of tax	$	201	$	169	$	156

Stock Option Activity

Stock Option Program
The following table summarizes stock option activity for the years ended December 31:
			2014			2013			2012
			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		43,938,778	$	83.84	56,565,030	$	80.33	64,148,415	$	77.28
	Granted:
		Annual	5,736,183		126.77	6,220,810		101.55	5,770,190		87.91
		Progressive (Reload)	―		―	140,447		109.83	110,065		89.65
		Other	―		―	191		119.62	51,661		89.25
	Exercised		(10,219,261)		82.37	(18,825,218)		79.25	(13,123,617)		68.78
	Canceled		(220,143)		105.11	(162,482)		89.92	(391,684)		83.65
	December 31		39,235,557	$	90.38	43,938,778	$	83.84	56,565,030	$	80.33
Options exercisable
	December 31		27,502,208	$	81.42	32,038,228	$	79.58	45,207,143	$	78.78

Stock Option Assumptions

Stock Option Assumptions
	Annual									Progressive (Reload)
	2014			2013			2012			2014			2013			2012
Exercise price	$	126.72		$	101.49		$	87.89		$	―		$	109.84		$	87.89
Risk-free interest rate		1.9	%		1.2	%		1.1	%		―	%		0.2	%		0.2	%
Dividend yield		2.6	%		2.7	%		2.6	%		―	%		2.7	%		2.6	%
Volatility		20.8	%		20.0	%		24.5	%		―	%		16.3	%		23.4	%
Expected life (months)		75			75			74			―			12			19
Black-Scholes fair value	$	19.63		$	13.46		$	14.94		$	―		$	6.42		$	8.50

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:
				2014			2013			2012
					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			3,105,361	$	92.31	3,261,562	$	85.17	4,858,972	$	73.02
		Granted
			Annual	798,615		126.79	946,774		101.57	968,522		87.92
			Other	78,252		152.74	44,401		111.19	99,337		85.07
		Vested		(1,100,675)		90.37	(1,100,095)		79.93	(2,594,468)		63.51
		Forfeited		(63,767)		97.23	(47,281)		90.82	(70,801)		82.65
	As of December 31			2,817,786	$	104.41	3,105,361	$	92.31	3,261,562	$	85.17

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:
			2014			2013			2012
				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		895,635	$	88.12	1,089,084	$	79.27	878,872	$	78.55
		Granted	305,225		124.89	353,734		96.87	467,531		81.55
		Distributed	(277,358)		84.74	(507,083)		75.16	―		―
		Performance change	212,461		109.74	(6,949)		77.01	(178,838)		81.27
		Forfeited	(36,212)		109.44	(33,151)		91.34	(78,481)		80.21
	As of December 31		1,099,752	$	102.65	895,635	$	88.12	1,089,084	$	79.27

General Employees' Stock Purchase Plan (GESPP)

General Employees' Stock Purchase Plan
		2014			2013			2012
			Weighted			Weighted			Weighted
			Average			Average			Average
		Shares	Exercise Price		Shares	Exercise Price		Shares	Exercise Price
Options granted		1,073,956	$	118.73	1,259,247	$	93.46	1,455,545	$	75.32
Options exercised		(1,073,956)		118.73	(1,259,247)		93.46	(1,455,545)		75.32
Shares available for grant -
	December 31	29,112,004			30,185,960			31,445,207