Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Six months ended
	June 30,				June 30,
(Millions)	2020		2019		2020		2019
Cost of sales	$	10	$	9	$	32	$	31
Selling, general and administrative expenses		35		36		108		118
Research, development and related expenses		7		7		32		33
Stock-based compensation expenses	$	52	$	52	$	172	$	182
Income tax benefits		(15)		(28)		(54)		(108)
Stock-based compensation expenses (benefits), net of tax	$	37	$	24	$	118	$	74

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the six months ended June 30, 2020:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic Value
(Options in thousands)	Options	Exercise Price		Life (months)	(millions)
Under option —
January 1	33,675	$	151.15
Granted:
Annual	4,741		157.26
Exercised	(1,639)		89.34
Forfeited	(106)		185.82
June 30	36,671	$	154.60	68	$	593
Options exercisable
June 30	28,682	$	147.72	56	$	593

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2020
Exercise price	$	157.24
Risk-free interest rate		1.5	%
Dividend yield		2.7	%
Expected volatility		19.7	%
Expected life (months)		78
Black-Scholes fair value	$	21.58

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, 2020:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Nonvested balance —
As of January 1	1,573	$	201.11
Granted
Annual	733		157.29
Other	11		174.03
Vested	(559)		176.17
Forfeited	(34)		189.07
As of June 30	1,724	$	190.63

Performance Shares Activity

The following table summarizes performance share activity during the six months ended June 30, 2020:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Undistributed balance —
As of January 1	444	$	205.58
Granted	191		153.02
Distributed	(206)		190.84
Performance change	23		161.93
Forfeited	(11)		164.61
As of June 30	441	$	188.39