Share-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Shareholders' Equity and Share-based Payments

Share-Based Compensation and Equity

Stock Options

Stock option activity for the three months ended March 31, 2020 was as follows:

(In thousands, except per share and term data)	Number of Shares	Weighted- Average Exercise  Price (Per Share)		Aggregate Intrinsic  Value		Weighted-Average  Remaining Contractual Term (Yrs)
Outstanding at beginning of year	15,416	$	56.36
Granted	2	73.01
Exercised	(2,449)	48.43
Forfeited and expired	(152)	61.55
Outstanding as of March 31, 2020	12,817	57.82		$	83,254	6.08
Exercisable as of March 31, 2020	6,269	$	54.59	$	61,354	4.55

The weighted-average assumptions used to estimate the fair value, under the Black-Scholes-Merton pricing model, of stock options granted during the three months ended March 31, 2020 were as follows:

Expected volatility (%)	24.5		%
Expected dividend rate (%)	1		%
Expected term (yrs)	6
Risk-free rate (%)	1.5		%
Fair value per option	$	17.53

As of March 31, 2020, there was $79 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 2.52 years.

Non-vested Shares and Share Units

Non-vested share and share unit activity for the three months ended March 31, 2020 was as follows:

(In thousands, except per share data)	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at beginning of year	2,634	$	65.30
Granted	43	72.28
Vested	(157)	64.01
Forfeited	(22)	65.49
Outstanding as of March 31, 2020	2,498	$	65.50

As of March 31, 2020, there was $108 million of total unrecognized compensation cost related to non-vested share and share unit awards granted under all plans. That cost is expected to be recognized over a weighted-average period of 1.88 years.

Share-Based Compensation Cost

The following table presents total compensation expense recognized with respect to stock options, non-vested shares and share units, and our associate stock purchase plan:

	Three Months Ended
(In thousands)	2020		2019
Stock option and non-vested share and share unit compensation expense	$	35,031	$	19,860
Associate stock purchase plan expense	1,101		1,542
Amounts capitalized in software development costs, net of amortization	(745)		187
Amounts charged against earnings, before income tax benefit	$	35,387	$	21,589
Amount of related income tax benefit recognized in earnings	$	6,443	$	4,201

Treasury Stock

Under our current share repurchase program, which was initially approved by our Board of Directors in May 2017 and most recently amended in December 2019, the Company is authorized to repurchase up to $3.70 billion of shares of our common stock, excluding transaction costs. The repurchases are to be effectuated in the open market, by block purchase, in privately negotiated transactions, or through other transactions managed by broker-dealers. No time limit was set for the completion of the program. During the three months ended March 31, 2020, we repurchased 9.2 million shares for total consideration of $650 million under the program. The shares were recorded as treasury stock and accounted for under the cost method. No repurchased shares have been retired. As of March 31, 2020, $1.03 billion remains available for repurchase under the program.

Dividends

On March 19, 2020, our Board of Directors declared a cash dividend of $0.18 per share on our issued and outstanding common stock, which was paid on April 17, 2020 to shareholders of record as of April 3, 2020. In connection with the declaration of such dividend, our non-vested shares and share units are entitled to dividend equivalents, which will be payable to the holder subject to, and upon vesting of, the underlying awards. Our outstanding stock options are not entitled to dividend or dividend equivalents. At March 31, 2020, our condensed consolidated balance sheet included a liability for dividends payable of $55 million, which is included in other current liabilities.

Accumulated Other Comprehensive Loss, Net (AOCI)

The components of AOCI, net of tax, were as follows:

	Foreign currency translation adjustment and other		Unrealized loss on cash flow hedge		Unrealized holding gain (loss) on available-for-sale investments		Total
(In thousands)
Balance at December 28, 2019	$	(106,347)	$	(12,578)	$	265	$	(118,660)
Other comprehensive income (loss) before reclassifications	(20,546)		(20,430)		(849)		(41,825)
Amounts reclassified from AOCI	—		1,122		—		1,122
Balance at March 31, 2020	$	(126,893)	$	(31,886)	$	(584)	$	(159,363)

	Foreign currency translation adjustment and other		Unrealized loss on cash flow hedge		Unrealized holding gain (loss) on available-for-sale investments		Total
(In thousands)
Balance at December 29, 2018	$	(102,939)	$	—	$	(613)	$	(103,552)
Other comprehensive income (loss) before reclassifications	2,321		—		637		2,958
Amounts reclassified from AOCI	—		—		—		—
Balance at March 30, 2019	$	(100,618)	$	—	$	24	$	(100,594)

The effects on net earnings of amounts reclassified from AOCI were as follows:

(In thousands)		Three Months Ended
AOCI Component	Location	2020		2019
Unrealized loss on cash flow hedge	Other income, net	$	(1,372)	$	—
	Income taxes	250		—
Total amount reclassified, net of tax		$	(1,122)	$	—