Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense


		Years ended December 31
(Millions)		2018			2017			2016
Cost of sales		$	48		$	49		$	47
Selling, general and administrative expenses			207			229			206
Research, development and related expenses			47			46			45
Stock-based compensation expenses		$	302		$	324		$	298
Income tax benefits		$	(154)		$	(327)		$	(272)
Stock-based compensation expenses (benefits), net of tax		$	148		$	(3)		$	26

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity for the years ended December 31:


		2018					2017					2016
				Weighted					Weighted					Weighted
		Number of		Average			Number of		Average			Number of		Average
(Options in thousands)		Options		Exercise Price			Options		Exercise Price			Options		Exercise Price
Under option —
January 1		34,965		$	125.73		36,196		$	112.07		38,552		$	102.01
Granted:
Annual		3,211			233.19		5,410			175.93		5,592			147.99
Exercised		(3,482)			91.01		(6,474)			90.37		(7,716)			86.76
Forfeited		(125)			188.00		(167)			162.36		(232)			148.43
December 31		34,569		$	138.98		34,965		$	125.73		36,196		$	112.07
Options exercisable
December 31		26,117		$	121.98		24,281		$	108.50		25,241		$	95.65

Stock Option Assumptions

Stock Option Assumptions


		Annual
		2018			2017			2016
Exercise price		$	233.63		$	175.76		$	147.87
Risk-free interest rate			2.7	%		2.1	%		1.5	%
Dividend yield			2.4	%		2.5	%		2.5	%
Expected volatility			21.0	%		17.3	%		20.8	%
Expected life (months)			78			78			77
Black-Scholes fair value		$	41.59		$	23.51		$	22.47

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:


		2018					2017					2016
				Weighted					Weighted					Weighted
				Average					Average					Average
		Number of		Grant Date			Number of		Grant Date			Number of		Grant Date
(Shares in thousands)		Shares		Fair Value			Shares		Fair Value			Shares		Fair Value
Nonvested balance —
As of January 1		1,994		$	162.60		2,185		$	145.64		2,441		$	127.47
Granted
Annual		467			233.61		604			176.10		749			148.20
Other		8			207.76		21			233.77		8			169.00
Vested		(640)			164.83		(769)			127.21		(960)			101.64
Forfeited		(40)			186.48		(47)			158.25		(53)			145.95
As of December 31		1,789		$	180.02		1,994		$	162.60		2,185		$	145.64

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:


		2018					2017					2016
				Weighted					Weighted					Weighted
				Average					Average					Average
		Number of		Grant Date			Number of		Grant Date			Number of		Grant Date
(Shares in thousands)		Shares		Fair Value			Shares		Fair Value			Shares		Fair Value
Undistributed balance —
As of January 1		686		$	171.90		656		$	142.98		871		$	120.89
Granted		166			229.13		201			191.28		219			160.17
Distributed		(206)			159.82		(314)			124.88		(367)			99.06
Performance change		(56)			198.39		155			173.91		(38)			155.98
Forfeited		(28)			204.09		(12)			171.36		(29)			149.08
As of December 31		562		$	188.96		686		$	171.90		656		$	142.98