Capital Stock

6 Months Ended

Jun. 30, 2019

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including acquisitions, 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 is at the discretion of our Board of Directors and depends 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 six months ended June 30, 2019 and 2018 is as follows:



Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Six Months Ended June 30, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
April 23, 2019	June 10, 2019	June 25, 2019	$0.80	$	206

Six Months Ended June 30, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192
April 24, 2018	June 8, 2018	June 25, 2018	$0.75	$	196

On July 23, 2019, our Audit Committee declared a third quarter 2019 dividend to shareholders of $0.80 per share, payable on September 25, 2019 to shareholders of record at the close of business on September 10, 2019.

Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On December 7, 2017, the Board of Directors authorized a $5,000 increase to the 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 from July 1, 2019 through July 17, 2019 (subsequent to June 30, 2019) and for the six months ended June 30, 2019 and 2018 is as follows:



	July 1, 2019 Through July 17, 2019		Six Months Ended June 30
	July 1, 2019 Through July 17, 2019		2019		2018
Shares repurchased	0.3		2.8		3.4
Average price per share	$	286.03	$	273.84	$	231.61
Aggregate cost	$	72	$	752	$	795
Authorization remaining at the end of the period	$	4,669	$	4,741	$	6,383

For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt” of this Form 10-Q and Note 12, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Stock Incentive Plans

A summary of stock option activity for the six months ended June 30, 2019 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, 2019	3.7		$	149.65
Granted	0.7		307.18
Exercised	(0.6	)	121.83
Forfeited or expired	(0.1	)	238.00
Outstanding at June 30, 2019	3.7		182.40		6.48	$	386
Exercisable at June 30, 2019	2.2		135.84		5.01	$	329

A summary of the nonvested restricted stock activity, including restricted stock units, for the six months ended June 30, 2019 is as follows:



	Restricted Stock Shares and Units		Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2019	1.7		$	183.32
Granted	0.5		307.08
Vested	(0.8	)	151.16
Forfeited	—		241.06
Nonvested at June 30, 2019	1.4		240.31

During the six months ended June 30, 2019, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three year period from 2019 to 2021. These grants have been included in the activity shown above, but will be subject to adjustment at the end of 2021 based on results in the three year period.

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 14, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

The following weighted-average assumptions were used to estimate the fair values of options granted during the six months ended June 30, 2019 and 2018:



	Six Months Ended June 30
	2019		2018
Risk-free interest rate	2.69	%	2.90	%
Volatility factor	25.00	%	30.00	%
Quarterly dividend yield	0.260	%	0.323	%
Weighted-average expected life (years)	4.40		3.70

The following weighted-average fair values per option or share were determined for the six months ended June 30, 2019 and 2018:



	Six Months Ended June 30
	2019		2018
Options granted during the period	$	68.80	$	55.27
Restricted stock awards granted during the period	307.08		231.81