Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2016		2015		2014
Cost of sales	$	47	$	46	$	47
Selling, general and administrative expenses		206		185		192
Research, development and related expenses		45		45		41
Stock-based compensation expenses	$	298	$	276	$	280
Income tax benefits	$	(272)	$	(87)	$	(79)
Stock-based compensation expenses (benefits), net of tax	$	26	$	189	$	201

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity for the years ended December 31:

	2016			2015			2014
		Weighted			Weighted			Weighted
	Number of	Average		Number of	Average		Number of	Average
	Options	Exercise Price		Options	Exercise Price		Options	Exercise Price
Under option —
January 1	38,552,445	$	102.01	39,235,557	$	90.38	43,938,778	$	83.84
Granted:
Annual	5,591,727		147.99	5,529,544		165.91	5,736,183		126.77
Exercised	(7,716,141)		86.76	(5,978,382)		83.74	(10,219,261)		82.37
Canceled	(231,799)		148.43	(234,274)		128.99	(220,143)		105.11
December 31	36,196,232	$	112.07	38,552,445	$	102.01	39,235,557	$	90.38
Options exercisable
December 31	25,240,759	$	95.65	27,262,062	$	85.97	27,502,208	$	81.42

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2016			2015			2014
Exercise price	$	147.87		$	165.94		$	126.72
Risk-free interest rate		1.5	%		1.5	%		1.9	%
Dividend yield		2.5	%		2.5	%		2.6	%
Expected volatility		20.8	%		20.1	%		20.8	%
Expected life (months)		77			76			75
Black-Scholes fair value	$	22.47		$	23.98		$	19.63

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:

	2016			2015			2014
		Weighted			Weighted			Weighted
		Average			Average			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	2,441,088	$	127.47	2,817,786	$	104.41	3,105,361	$	92.31
Granted
Annual	749,068		148.20	671,204		165.86	798,615		126.79
Other	8,115		169.00	26,886		156.94	78,252		152.74
Vested	(960,345)		101.64	(1,010,612)		89.99	(1,100,675)		90.37
Forfeited	(52,880)		145.95	(64,176)		118.99	(63,767)		97.23
As of December 31	2,185,046	$	145.64	2,441,088	$	127.47	2,817,786	$	104.41

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:

	2016			2015			2014
		Weighted			Weighted			Weighted
		Average			Average			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	871,192	$	120.89	1,099,752	$	102.65	895,635	$	88.12
Granted	219,431		160.17	227,798		158.88	305,225		124.89
Distributed	(367,428)		99.06	(323,938)		83.08	(277,358)		84.74
Performance change	(37,534)		155.98	(106,760)		127.70	212,461		109.74
Forfeited	(29,383)		149.08	(25,660)		125.33	(36,212)		109.44
As of December 31	656,278	$	142.98	871,192	$	120.89	1,099,752	$	102.65

General Employees' Stock Purchase Plan (GESPP)

General Employees’ Stock Purchase Plan

	2016			2015			2014
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Exercise Price		Shares	Exercise Price		Shares	Exercise Price
Options granted	987,478	$	140.06	1,007,669	$	133.52	1,073,956	$	118.73
Options exercised	(987,478)		140.06	(1,007,669)		133.52	(1,073,956)		118.73
Shares available for grant - December 31	27,116,857			28,104,335			29,112,004