Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Six months ended
	June 30,				June 30,
(Millions)	2019		2018		2019		2018
Cost of sales	$	9	$	9	$	31	$	32
Selling, general and administrative expenses		36		33		118		142
Research, development and related expenses		7		7		33		34
Stock-based compensation expenses	$	52	$	49	$	182	$	208
Income tax benefits	$	(28)	$	(19)	$	(108)	$	(117)
Stock-based compensation expenses (benefits), net of tax	$	24	$	30	$	74	$	91

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the six months ended June 30, 2019:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic Value
(Options in thousands)	Options	Exercise Price		Life (months)	(millions)
Under option —
January 1	34,569	$	138.98
Granted:
Annual	3,457		200.80
Exercised	(3,039)		89.26
Forfeited	(43)		201.03
June 30	34,944	$	149.34	69	$	1,135
Options exercisable
June 30	27,643	$	134.86	59	$	1,135

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2019
Exercise price	$	201.12
Risk-free interest rate		2.6	%
Dividend yield		2.5	%
Expected volatility		20.4	%
Expected life (months)		79
Black-Scholes fair value	$	34.19

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 six months ended June 30, 2019:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Nonvested balance —
As of January 1	1,789	$	180.02
Granted
Annual	564		200.41
Other	8		186.08
Vested	(679)		148.00
Forfeited	(35)		184.52
As of June 30	1,647	$	200.13

Performance Shares Activity

The following table summarizes performance share activity during the six months ended June 30, 2019:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Undistributed balance —
As of January 1	562	$	188.96
Granted	162		207.49
Distributed	(210)		162.16
Performance change	(83)		207.20
Forfeited	(15)		209.44
As of June 30	416	$	205.26