Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2017		2016		2015
Cost of sales	$	49	$	47	$	46
Selling, general and administrative expenses		229		206		185
Research, development and related expenses		46		45		45
Stock-based compensation expenses	$	324	$	298	$	276
Income tax benefits	$	(327)	$	(272)	$	(87)
Stock-based compensation expenses (benefits), net of tax	$	(3)	$	26	$	189

Stock Option Activity

Stock Option Program

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

	2017			2016			2015
		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	36,196,232	$	112.07	38,552,445	$	102.01	39,235,557	$	90.38
Granted:
Annual	5,409,628		175.93	5,591,727		147.99	5,529,544		165.91
Exercised	(6,474,117)		90.37	(7,716,141)		86.76	(5,978,382)		83.74
Forfeited	(166,579)		162.36	(231,799)		148.43	(234,274)		128.99
December 31	34,965,164	$	125.73	36,196,232	$	112.07	38,552,445	$	102.01
Options exercisable
December 31	24,281,464	$	108.50	25,240,759	$	95.65	27,262,062	$	85.97

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2017			2016			2015
Exercise price	$	175.76		$	147.87		$	165.94
Risk-free interest rate		2.1	%		1.5	%		1.5	%
Dividend yield		2.5	%		2.5	%		2.5	%
Expected volatility		17.3	%		20.8	%		20.1	%
Expected life (months)		78			77			76
Black-Scholes fair value	$	23.51		$	22.47		$	23.98

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:

	2017			2016			2015
		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	2,185,046	$	145.64	2,441,088	$	127.47	2,817,786	$	104.41
Granted
Annual	604,256		176.10	749,068		148.20	671,204		165.86
Other	20,692		233.77	8,115		169.00	26,886		156.94
Vested	(769,598)		127.21	(960,345)		101.64	(1,010,612)		89.99
Forfeited	(46,590)		158.25	(52,880)		145.95	(64,176)		118.99
As of December 31	1,993,806	$	162.60	2,185,046	$	145.64	2,441,088	$	127.47

Performance Shares Activity

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

	2017			2016			2015
		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	656,278	$	142.98	871,192	$	120.89	1,099,752	$	102.65
Granted	201,261		191.28	219,431		160.17	227,798		158.88
Distributed	(313,942)		124.88	(367,428)		99.06	(323,938)		83.08
Performance change	154,774		173.91	(37,534)		155.98	(106,760)		127.70
Forfeited	(12,498)		171.36	(29,383)		149.08	(25,660)		125.33
As of December 31	685,873	$	171.90	656,278	$	142.98	871,192	$	120.89

General Employees' Stock Purchase Plan (GESPP)

General Employees’ Stock Purchase Plan

	2017			2016			2015
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Exercise Price		Shares	Exercise Price		Shares	Exercise Price
Options granted	877,705	$	170.42	987,478	$	140.06	1,007,669	$	133.52
Options exercised	(877,705)		170.42	(987,478)		140.06	(1,007,669)		133.52
Shares available for grant - December 31	26,239,152			27,116,857			28,104,335