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Stock-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2017
Stock-Based Compensation |
Stock-Based Compensation Expense | Stock-Based Compensation Expense
|  | Years ended December 31 |
(Millions) |  | 2017 |  | 2016 |  | 2015 |
Cost of sales |  | $ | 49 |  | $ | 47 |  | $ | 46 |
Selling, general and administrative expenses |  |  | 229 |  |  | 206 |  |  | 185 |
Research, development and related expenses |  |  | 46 |  |  | 45 |  |  | 45 |
Stock-based compensation expenses |  | $ | 324 |  | $ | 298 |  | $ | 276 |
Income tax benefits |  | $ | (327) |  | $ | (272) |  | $ | (87) |
Stock-based compensation expenses (benefits), net of tax |  | $ | (3) |  | $ | 26 |  | $ | 189 |
Stock Option Activity | Stock Option Program The following table summarizes stock option activity for the years ended December 31:
|  | 2017 |  | 2016 |  | 2015 |
|  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted |
|  | Number of |  | Average |  | Number of |  | Average |  | Number of |  | Average |
|  | Options |  | Exercise Price |  | Options |  | Exercise Price |  | Options |  | Exercise Price |
Under option — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January 1 |  | 36,196,232 |  | $ | 112.07 |  | 38,552,445 |  | $ | 102.01 |  | 39,235,557 |  | $ | 90.38 |
Granted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Annual |  | 5,409,628 |  |  | 175.93 |  | 5,591,727 |  |  | 147.99 |  | 5,529,544 |  |  | 165.91 |
Exercised |  | (6,474,117) |  |  | 90.37 |  | (7,716,141) |  |  | 86.76 |  | (5,978,382) |  |  | 83.74 |
Forfeited |  | (166,579) |  |  | 162.36 |  | (231,799) |  |  | 148.43 |  | (234,274) |  |  | 128.99 |
December 31 |  | 34,965,164 |  | $ | 125.73 |  | 36,196,232 |  | $ | 112.07 |  | 38,552,445 |  | $ | 102.01 |
Options exercisable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31 |  | 24,281,464 |  | $ | 108.50 |  | 25,240,759 |  | $ | 95.65 |  | 27,262,062 |  | $ | 85.97 |
Stock Option Assumptions | Stock Option Assumptions
|  | Annual |
|  | 2017 |  | 2016 |  | 2015 |
Exercise price |  | $ | 175.76 |  | $ | 147.87 |  | $ | 165.94 |
Risk-free interest rate |  |  | 2.1 | % |  | 1.5 | % |  | 1.5 | %
Dividend yield |  |  | 2.5 | % |  | 2.5 | % |  | 2.5 | %
Expected volatility |  |  | 17.3 | % |  | 20.8 | % |  | 20.1 | %
Expected life (months) |  |  | 78 |  |  | 77 |  |  | 76 |
Black-Scholes fair value |  | $ | 23.51 |  | $ | 22.47 |  | $ | 23.98 |
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:
|  | 2017 |  | 2016 |  | 2015 |
|  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted |
|  |  |  | Average |  |  |  | Average |  |  |  | Average |
|  | Number of |  | Grant Date |  | Number of |  | Grant Date |  | Number of |  | Grant Date |
|  | Awards |  | Fair Value |  | Awards |  | Fair Value |  | Awards |  | Fair Value |
Nonvested balance — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1 |  | 2,185,046 |  | $ | 145.64 |  | 2,441,088 |  | $ | 127.47 |  | 2,817,786 |  | $ | 104.41 |
Granted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Annual |  | 604,256 |  |  | 176.10 |  | 749,068 |  |  | 148.20 |  | 671,204 |  |  | 165.86 |
Other |  | 20,692 |  |  | 233.77 |  | 8,115 |  |  | 169.00 |  | 26,886 |  |  | 156.94 |
Vested |  | (769,598) |  |  | 127.21 |  | (960,345) |  |  | 101.64 |  | (1,010,612) |  |  | 89.99 |
Forfeited |  | (46,590) |  |  | 158.25 |  | (52,880) |  |  | 145.95 |  | (64,176) |  |  | 118.99 |
As of December 31 |  | 1,993,806 |  | $ | 162.60 |  | 2,185,046 |  | $ | 145.64 |  | 2,441,088 |  | $ | 127.47 |
Performance Shares Activity | The following table summarizes performance share activity for the years ended December 31:
|  | 2017 |  | 2016 |  | 2015 |
|  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted |
|  |  |  | Average |  |  |  | Average |  |  |  | Average |
|  | Number of |  | Grant Date |  | Number of |  | Grant Date |  | Number of |  | Grant Date |
|  | Awards |  | Fair Value |  | Awards |  | Fair Value |  | Awards |  | Fair Value |
Undistributed balance — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1 |  | 656,278 |  | $ | 142.98 |  | 871,192 |  | $ | 120.89 |  | 1,099,752 |  | $ | 102.65 |
Granted |  | 201,261 |  |  | 191.28 |  | 219,431 |  |  | 160.17 |  | 227,798 |  |  | 158.88 |
Distributed |  | (313,942) |  |  | 124.88 |  | (367,428) |  |  | 99.06 |  | (323,938) |  |  | 83.08 |
Performance change |  | 154,774 |  |  | 173.91 |  | (37,534) |  |  | 155.98 |  | (106,760) |  |  | 127.70 |
Forfeited |  | (12,498) |  |  | 171.36 |  | (29,383) |  |  | 149.08 |  | (25,660) |  |  | 125.33 |
As of December 31 |  | 685,873 |  | $ | 171.90 |  | 656,278 |  | $ | 142.98 |  | 871,192 |  | $ | 120.89 |
General Employees' Stock Purchase Plan (GESPP) | General Employees’ Stock Purchase Plan
|  | 2017 |  | 2016 |  | 2015 |
|  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted |
|  |  |  | Average |  |  |  | Average |  |  |  | Average |
|  | Shares |  | Exercise Price |  | Shares |  | Exercise Price |  | Shares |  | Exercise Price |
Options granted |  | 877,705 |  | $ | 170.42 |  | 987,478 |  | $ | 140.06 |  | 1,007,669 |  | $ | 133.52 |
Options exercised |  | (877,705) |  |  | 170.42 |  | (987,478) |  |  | 140.06 |  | (1,007,669) |  |  | 133.52 |
Shares available for grant - December 31 |  | 26,239,152 |  |  |  |  | 27,116,857 |  |  |  |  | 28,104,335 |  |  |  |

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