Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2020		2019		2018
Cost of sales	$	50	$	47	$	48
Selling, general and administrative expenses		169		185		207
Research, development and related expenses		43		46		47
Stock-based compensation expenses	$	262	$	278	$	302
Income tax benefits		(82)		(141)		(154)
Stock-based compensation expenses (benefits), net of tax	$	180	$	137	$	148

Stock Option Activity

Stock Option Program

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

	2020			2019			2018
		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	33,675	$	151.15	34,569	$	138.98	34,965	$	125.73
Granted	4,777		157.25	3,434		200.80	3,211		233.19
Exercised	(2,759)		93.23	(4,193)		89.89	(3,482)		91.01
Forfeited	(292)		181.33	(135)		201.27	(125)		188.00
December 31	35,401	$	156.23	33,675	$	151.15	34,569	$	138.98
Options exercisable
December 31	27,537	$	149.67	26,487	$	136.75	26,117	$	121.98

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2020			2019			2018
Exercise price	$	157.24		$	201.12		$	233.63
Risk-free interest rate		1.5	%		2.6	%		2.7	%
Dividend yield		2.7	%		2.5	%		2.4	%
Expected volatility		19.7	%		20.4	%		21.0	%
Expected life (months)		78			79			78
Black-Scholes fair value	$	21.58		$	34.19		$	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 for the years ended December 31:

	2020			2019			2018
		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	1,573	$	201.11	1,789	$	180.02	1,994	$	162.60
Granted
Annual	733		157.29	564		200.41	467		233.61
Other	45		159.49	15		180.08	8		207.76
Vested	(570)		176.20	(732)		149.33	(640)		164.83
Forfeited	(59)		196.31	(63)		192.52	(40)		186.48
As of December 31	1,722	$	189.78	1,573	$	201.11	1,789	$	180.02

Performance Shares Activity

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

	2020			2019			2018
		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	444	$	205.58	562	$	188.96	686	$	171.90
Granted	203		153.16	166		207.49	166		229.13
Distributed	(206)		190.84	(210)		162.16	(206)		159.82
Performance change	25		166.49	(48)		204.73	(56)		198.39
Forfeited	(43)		172.92	(26)		209.96	(28)		204.09
As of December 31	423	$	188.61	444	$	205.58	562	$	188.96