Capital Stock

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including common stock and debt security repurchases and dividends to shareholders. The declaration and payment of any dividends or repurchases of our common stock or debt are at the discretion of our Board of Directors and depend upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

A summary of the cash dividend activity for the three months ended March 31, 2014 and 2013 is as follows:



Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Three Months Ended March 31, 2014
January 28, 2014	March 10, 2014	March 25, 2014	$0.4375	$123.4

Three Months Ended March 31, 2013
February 20, 2013	March 8, 2013	March 25, 2013	$0.3750	$113.4

Under our Board of Directors’ authorization, we maintain a common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

A summary of common stock repurchases for the period April 1, 2014 through April 15, 2014 (subsequent to March 31, 2014) and for the three months ended March 31, 2014 and 2013 is as follows:



	April 1, 2014 Through April 15, 2014		Three Months Ended March 31
	April 1, 2014 Through April 15, 2014		2014		2013
Shares repurchased	2.3		14.3		5.5
Average price per share	$	98.03	$	88.14	$	62.41
Aggregate cost	$	220.8	$	1,262.8	$	340.2
Authorization remaining at the end of each period	$	2,207.4	$	2,428.2	$	1,496.6

Under the common stock repurchase program authorized by our Board of Directors, on February 4, 2014, we entered into an accelerated share repurchase agreement with a counterparty. The agreement provided for the repurchase of a number of our shares, equal to $600.0, as determined by the volume weighted-average price of our shares during the term of the agreement. During the three months ended March 31, 2014 we repurchased 6.6 shares under the agreement. The shares repurchased under the agreement are included in the amount disclosed above as shares repurchased during the three months ended March 31, 2014.

Stock Incentive Plans

A summary of stock option activity for the three months ended March 31, 2014 is as follows:



	Number of Shares		Weighted- Average Option Price per Share		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2014	10.0		$	65.38
Granted	1.7		89.44
Exercised	(2.0	)	66.39
Forfeited or expired	(0.1	)	62.71
Outstanding at March 31, 2014	9.6		69.46		3.9	$	289.6
Exercisable at March 31, 2014	6.3		65.72		2.6	$	212.6

A summary of the status of nonvested restricted stock activity, including restricted stock units, for the three months ended March 31, 2014 is as follows:



	Restricted Stock Shares and Units		Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2014	4.2		$	63.83
Granted	1.3		89.43
Vested	(1.5	)	64.15
Forfeited	(0.3	)	63.33
Nonvested at March 31, 2014	3.7		72.51

Fair Value

We use a binomial lattice valuation model to estimate the fair value of all stock options granted. For a more detailed discussion of our stock incentive plan fair value methodology, see Note 15, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2013 included in our 2013 Annual Report on Form 10-K.

The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2014 and 2013:



	2014		2013
Risk-free interest rate	2.16	%	1.25	%
Volatility factor	35.00	%	35.00	%
Quarterly dividend yield	0.50	%	0.60	%
Weighted-average expected life (years)	3.75		4.00

The following weighted-average fair values were determined for the three months ended March 31, 2014 and 2013:



	2014		2013
Options granted during the period	$	22.20	$	14.51
Restricted stock awards granted during the period	89.43		61.81