Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2019		2018		2019		2018
Cost of sales	$	8	$	8	$	39	$	40
Selling, general and administrative expenses		33		35		151		177
Research, development and related expenses		7		7		40		41
Stock-based compensation expenses	$	48	$	50	$	230	$	258
Income tax benefits	$	(12)	$	(20)	$	(120)	$	(137)
Stock-based compensation expenses (benefits), net of tax	$	36	$	30	$	110	$	121

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the nine months ended September 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	(3,390)		90.13
Forfeited	(96)		198.89
September 30	34,540	$	149.80	66	$	910
Options exercisable
September 30	27,295	$	135.36	56	$	910

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 nine months ended September 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	13		181.09
Vested	(686)		148.24
Forfeited	(50)		190.88
As of September 30	1,630	$	200.12

Performance Shares Activity

The following table summarizes performance share activity during the nine months ended September 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	(72)		206.51
Forfeited	(22)		209.93
As of September 30	420	$	205.34