Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2020		2019		2020		2019
Cost of sales	$	9	$	8	$	41	$	39
Selling, general and administrative expenses		30		33		138		151
Research, development and related expenses		5		7		37		40
Stock-based compensation expenses	$	44	$	48	$	216	$	230
Income tax benefits		(13)		(12)		(67)		(120)
Stock-based compensation expenses (benefits), net of tax	$	31	$	36	$	149	$	110

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the nine months ended September 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
Other	36		155.43
Exercised	(2,132)		91.51
Forfeited	(250)		179.87
September 30	36,070	$	155.28	65	$	643
Options exercisable
September 30	28,189	$	148.59	54	$	629

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 nine months ended September 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	41		158.91
Vested	(560)		176.21
Forfeited	(52)		198.48
As of September 30	1,735	$	189.72

Performance Shares Activity

The following table summarizes performance share activity during the nine months ended September 30, 2020:

		Weighted
		Average
	Number of	Grant Date
(Shares in thousands)	Shares	Fair Value
Undistributed balance —
As of January 1	444	$	205.58
Granted	203		153.16
Distributed	(206)		190.84
Performance change	25		166.49
Forfeited	(43)		172.92
As of September 30	423	$	188.61