Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense


	Three months ended						Six months ended
	June 30,						June 30,
(Millions)	2018			2017			2018			2017
Cost of sales	$	9		$	9		$	32		$	32
Selling, general and administrative expenses		33			43			142			141
Research, development and related expenses		7			7			34			33
Stock-based compensation expenses	$	49		$	59		$	208		$	206
Income tax benefits	$	(19)		$	(74)		$	(117)		$	(222)
Stock-based compensation expenses (benefits), net of tax	$	30		$	(15)		$	91		$	(16)

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity during the six months ended June 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		3,174			233.62
Exercised		(2,378)			89.67
Forfeited		(73)			186.24
June 30		35,688		$	137.60		71		$	2,226
Options exercisable
June 30		27,222		$	120.84		60		$	2,066

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 six months ended June 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		3			209.26
Vested		(632)			164.37
Forfeited		(22)			177.93
As of June 30		1,810		$	180.22

Performance Shares Activity

The following table summarizes performance share activity during the six months ended June 30, 2018:


				Weighted
				Average
		Number of		Grant Date
(Shares in thousands)		Shares		Fair Value
Undistributed balance —
As of January 1		686		$	171.90
Granted		156			231.34
Distributed		(206)			159.82
Performance change		2			249.07
Forfeited		(11)			194.69
As of June 30		627		$	190.52