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Stock-Based Compensation (Tables) | 9 Months Ended
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Sep. 30, 2018
Stock-Based Compensation |
Stock-Based Compensation Expense | Stock-Based Compensation Expense
| Three months ended |  | Nine months ended |
| September 30, |  | September 30, |
(Millions) | 2018 |  | 2017 |  | 2018 |  | 2017 |
Cost of sales | $ | 8 |  | $ | 9 |  | $ | 40 |  | $ | 41 |
Selling, general and administrative expenses |  | 35 |  |  | 45 |  |  | 177 |  |  | 186 |
Research, development and related expenses |  | 7 |  |  | 6 |  |  | 41 |  |  | 39 |
Stock-based compensation expenses | $ | 50 |  | $ | 60 |  | $ | 258 |  | $ | 266 |
Income tax benefits | $ | (20) |  | $ | (35) |  | $ | (137) |  | $ | (257) |
Stock-based compensation expenses (benefits), net of tax | $ | 30 |  | $ | 25 |  | $ | 121 |  | $ | 9 |
Stock Option Activity | Stock Option Program The following table summarizes stock option activity during the nine months ended September 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 |  | 3,211 |  |  | 233.19 |  |  |  |  |  |
Exercised |  | (2,974) |  |  | 91.16 |  |  |  |  |  |
Forfeited |  | (106) |  |  | 187.42 |  |  |  |  |  |
September 30 |  | 35,096 |  | $ | 138.30 |  | 69 |  | $ | 2,613 |
Options exercisable |  |  |  |  |  |  |  |  |  |  |
September 30 |  | 26,624 |  | $ | 121.37 |  | 58 |  | $ | 2,379 |
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 nine months ended September 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 |  | 6 |  |  | 208.36 |
Vested |  | (633) |  |  | 164.40 |
Forfeited |  | (34) |  |  | 186.02 |
As of September 30 |  | 1,800 |  | $ | 180.11 |
Performance Shares Activity | The following table summarizes performance share activity during the nine months ended September 30, 2018:
|  |  |  | Weighted |
|  |  |  | Average |
|  | Number of |  | Grant Date |
(Shares in thousands) |  | Shares |  | Fair Value |
Undistributed balance — |  |  |  |  |  |
As of January 1 |  | 686 |  | $ | 171.90 |
Granted |  | 166 |  |  | 229.13 |
Distributed |  | (206) |  |  | 159.82 |
Performance change |  | (49) |  |  | 196.85 |
Forfeited |  | (28) |  |  | 204.09 |
As of September 30 |  | 569 |  | $ | 189.19 |

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- Definition Tabular disclosure for stock option plans. Includes, but is not limited to, outstanding awards at beginning and end of year, grants, exercises, forfeitures, and weighted-average grant date fair value. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c)(1) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
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- Definition Tabular disclosure of the significant assumptions used during the year to estimate the fair value of stock options, including, but not limited to: (a) expected term of share options and similar instruments, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (f)(2) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
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