Capital Stock

6 Months Ended

Jun. 30, 2023

Banking Regulation, Total Capital [Abstract]

Capital Stock

Capital Stock

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 our cash dividend activity for the six months ended June 30, 2023 and 2022 is as follows: 

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Six Months Ended June 30, 2023
January 24, 2023	March 10, 2023	March 24, 2023	$1.48	$	351
April 18, 2023	June 9, 2023	June 23, 2023	$1.48	$	350
Six Months Ended June 30, 2022
January 25, 2022	March 10, 2022	March 25, 2022	$1.28	$	309
April 19, 2022	June 10, 2022	June 24, 2022	$1.28	$	309

On July 18, 2023, our Audit Committee declared a third quarter 2023 dividend to shareholders of $1.48 per share, payable on September 22, 2023 to shareholders of record at the close of business on September 8, 2023.

Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On January 24, 2023, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized a $5,000 increase to the common stock repurchase program. No duration has been placed on the common stock repurchase program, and we reserve the right to discontinue the program at any time. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are affected 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 six months ended June 30, 2023 and 2022 is as follows:

	Six Months Ended June 30
	2023		2022
Shares repurchased	2.7		2.5
Average price per share	$	466.62	$	471.72
Aggregate cost	$	1,268	$	1,169
Authorization remaining at the end of the period	$	5,608	$	3,022

For additional information regarding the use of capital for debt security repurchases, see Note 9, “Debt,” included in this Form 10-Q and Note 13, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our 2022 Annual Report on Form 10-K.

Stock Incentive Plans

A summary of stock option activity for the six months ended June 30, 2023 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, 2023	2.8	$	293.28
Granted	0.6	469.05
Exercised	(0.2)	268.35
Forfeited or expired	—	391.44
Outstanding at June 30, 2023	3.2	323.85		6.51	$	402
Exercisable at June 30, 2023	2.1	265.51		5.31	$	376

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the six months ended June 30, 2023 is as follows:

	Restricted Stock Shares and Units	Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2023	1.2	$	357.21
Granted	0.6	469.60
Vested	(0.6)	301.18
Forfeited	—	405.25
Nonvested at June 30, 2023	1.2	422.67

During the six months ended June 30, 2023, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2023 to 2025. These grants have been included in the activity shown above but will be subject to adjustment at the end of 2025 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 15, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our 2022 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, 2023 and 2022:

	Six Months Ended June 30
	2023		2022
Risk-free interest rate	3.95	%	1.97	%
Volatility factor	29.00	%	29.00	%
Quarterly dividend yield	0.316	%	0.282	%
Weighted-average expected life (years)	4.40		5.10

The following weighted-average fair values per option or share were determined for the six months ended June 30, 2023 and 2022: 

	Six Months Ended June 30
	2023		2022
Options granted during the period	$	127.13	$	116.80
Restricted stock awards granted during the period	469.60		452.78