Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2018		2017		2018		2017
Cost of sales	$	8	$	9	$	40	$	41
Selling, general and administrative expenses		35		45		177		186
Research, development and related expenses		7		6		41		39
Stock-based compensation expenses	$	50	$	60	$	258	$	266
Income tax benefits	$	(20)	$	(35)	$	(137)	$	(257)
Stock-based compensation expenses (benefits), net of tax	$	30	$	25	$	121	$	9

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the nine months ended September 30, 2018:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic Value
(Options in thousands)	Options	Exercise Price		Life (months)	(millions)
Under option —
January 1	34,965	$	125.73
Granted:
Annual	3,211		233.19
Exercised	(2,974)		91.16
Forfeited	(106)		187.42
September 30	35,096	$	138.30	69	$	2,613
Options exercisable
September 30	26,624	$	121.37	58	$	2,379

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2018
Exercise price	$	233.63
Risk-free interest rate		2.7	%
Dividend yield		2.4	%
Expected volatility		21.0	%
Expected life (months)		78
Black-Scholes fair value	$	41.59

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 nine months ended September 30, 2018:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Nonvested balance —
As of January 1	1,994	$	162.60
Granted
Annual	467		233.61
Other	6		208.36
Vested	(633)		164.40
Forfeited	(34)		186.02
As of September 30	1,800	$	180.11

Performance Shares Activity

The following table summarizes performance share activity during the nine months ended September 30, 2018:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Undistributed balance —
As of January 1	686	$	171.90
Granted	166		229.13
Distributed	(206)		159.82
Performance change	(49)		196.85
Forfeited	(28)		204.09
As of September 30	569	$	189.19