Stock Transactions and Stock-based Compensation (Tables)

3 Months Ended

Apr. 01, 2022

Share-based Payment Arrangement [Abstract]

Summary of Share Activity

The following table summarizes the Company’s share activity (shares in millions):

	Three-Month Period Ended
	April 1, 2022	April 2, 2021
Preferred stock - shares issued:
Balance, beginning and end of period	3.4	3.4
Common stock - shares issued:
Balance, beginning of period	855.7	851.3
Common stock-based compensation awards	1.3	1.5
Common stock issued in connection with Liquid Yield Option Notes (“LYONs”) conversions	—	0.9
Balance, end of period	857.0	853.7

Key Terms of Shares

The following summarizes the key terms of the MCPS Shares:

	Annual Cumulative Dividend Rate		Liquidation Preference per share		Minimum Conversion Rate	Maximum Conversion Rate	Mandatory Conversion Date
Series A	4.75	%	$	1,000	6.6632 shares	8.1624 shares	April 15, 2022
Series B	5.00	%	$	1,000	5.0115 shares	6.1391 shares	April 15, 2023

Components of Stock-Based Compensation Program

The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):

	Three-Month Period Ended
	April 1, 2022		April 2, 2021
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense	$	46	$	33
Income tax benefit	(9)		(7)
RSU/PSU expense, net of income taxes	37		26
Stock options:
Pretax compensation expense	34		21
Income tax benefit	(7)		(4)
Stock option expense, net of income taxes	27		17
Total stock-based compensation:
Pretax compensation expense	80		54
Income tax benefit	(16)		(11)
Total stock-based compensation expense, net of income taxes	$	64	$	43

Components of Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions).

	Foreign Currency Translation Adjustments		Pension and Postretirement Plan Benefit Adjustments			Cash Flow Hedge Adjustments			Accumulated Comprehensive Income (Loss)
For the Three-Month Period Ended April 1, 2022:
Balance, December 31, 2021	$	(539)	$	(550)		$	62		$	(1,027)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(331)		—			125			(206)
Income tax impact	(12)		—			(30)			(42)
Other comprehensive income (loss) before reclassifications, net of income taxes	(343)		—			95			(248)
Reclassification adjustments:
Increase (decrease)	—		18		(a)	(115)		(b)	(97)
Income tax impact	—		(4)			—			(4)
Reclassification adjustments, net of income taxes	—		14			(115)			(101)
Net other comprehensive income (loss), net of income taxes	(343)		14			(20)			(349)
Balance, April 1, 2022	$	(882)	$	(536)		$	42		$	(1,376)
For the Three-Month Period Ended April 2, 2021:
Balance, December 31, 2020	$	745	$	(928)		$	(185)		$	(368)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(917)		—			110			(807)
Income tax impact	(5)		—			—			(5)
Other comprehensive income (loss) before reclassifications, net of income taxes	(922)		—			110			(812)
Reclassification adjustments:
Increase (decrease)	—		13		(a)	(152)		(b)	(139)
Income tax impact	—		(3)			—			(3)
Reclassification adjustments, net of income taxes	—		10			(152)			(142)
Net other comprehensive income (loss), net of income taxes	(922)		10			(42)			(954)
Balance, April 2, 2021	$	(177)	$	(918)		$	(227)		$	(1,322)

(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Notes 7 and 12 for additional details).

(b) Reflects reclassification to earnings related to cash flow hedges of certain long-term debt (refer to Note 11 for additional details).