Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended
	March 31,
(Millions)	2017		2016
Cost of sales	$	23	$	23
Selling, general and administrative expenses		98		96
Research, development and related expenses		26		25
Stock-based compensation expenses	$	147	$	144
Income tax benefits	$	(148)	$	(127)
Stock-based compensation expenses (benefits), net of tax	$	(1)	$	17

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the three months ended March 31, 2017:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic Value
	Options	Exercise Price		Life (months)	(millions)
Under option —
January 1	36,196,232	$	112.07
Granted:
Annual	5,409,628		175.93
Exercised	(3,037,302)		89.29
Canceled	(42,849)		156.38
March 31	38,525,709	$	122.78	76	$	2,641
Options exercisable
March 31	27,691,364	$	106.36	63	$	2,353

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2017
Exercise price	$	175.76
Risk-free interest rate		2.1	%
Dividend yield		2.5	%
Expected volatility		17.3	%
Expected life (months)		78
Black-Scholes fair value	$	23.51

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity during the three months ended March 31, 2017:

		Weighted
		Average
	Number of	Grant Date
	Awards	Fair Value
Nonvested balance —
As of January 1	2,185,046	$	145.64
Granted
Annual	604,256		176.10
Other	571		175.17
Vested	(724,705)		127.57
Forfeited	(12,014)		153.49
As of March 31	2,053,154	$	160.94

Performance Shares Activity

The following table summarizes performance share activity during the three months ended March 31, 2017:

		Weighted
		Average
	Number of	Grant Date
	Awards	Fair Value
Undistributed balance —
As of January 1	656,278	$	142.98
Granted	181,898		189.75
Distributed	(312,173)		124.63
Performance change	110,965		174.05
Forfeited	(1,682)		159.53
As of March 31	635,286	$	170.77