Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2015		2014		2015		2014
Cost of sales	$	8	$	9	$	39	$	42
Selling, general and administrative expenses		31		31		154		143
Research, development and related expenses		7		7		40		36
Stock-based compensation expenses	$	46	$	47	$	233	$	221
Income tax benefits	$	(13)	$	(14)	$	(74)	$	(67)
Stock-based compensation expenses, net of tax	$	33	$	33	$	159	$	154

Stock Option Activity

The following table summarizes stock option activity during the nine months ended September 30, 2015:

Stock Option Program

				Weighted
				Average
		Weighted		Remaining	Weighted
	Number of	Average		Contractual	Average
	Options	Exercise Price		Life (months)	Exercise Price
Under option —
January 1	39,235,557	$	90.38
Granted:
Annual	5,529,544		165.91
Exercised	(4,947,316)		83.44
Canceled	(185,120)		127.13
September 30	39,632,665	$	101.62	68	$	1,723
Options exercisable
September 30	28,278,569	$	85.94	54	$	1,579

Stock Option Assumptions

	Annual
	2015
Exercise price	$	165.94
Risk-free interest rate		1.5	%
Dividend yield		2.5	%
Volatility		20.1	%
Expected life (months)		76
Black-Scholes fair value	$	23.98

Restricted Stock Units and Restricted Stock Activity

Restricted Stock Units and Restricted Stock

		Weighted
		Average
	Number of	Grant Date
	Awards	Fair Value
Nonvested balance —
As of January 1	2,817,786	$	104.41
Granted
Annual	671,204		165.86
Other	18,375		160.63
Vested	(1,005,131)		89.88
Forfeited	(44,907)		118.19
As of September 30	2,457,327	$	127.30

Performance Shares Activity

The following table summarizes performance share activity during the nine months ended September 30, 2015:

		Weighted
		Average
	Number of	Grant Date
	Awards	Fair Value
Undistributed balance —
As of January 1	1,099,752	$	102.65
Granted	227,798		158.88
Distributed	(323,938)		83.08
Performance change	(95,316)		129.73
Forfeited	(20,834)		123.02
As of September 30	887,462	$	120.84