Stockholders' Deficit

Preferred and Preference Stocks

NIC has authorized 30 million shares of preferred stock, none of which have been issued, with a par value of $1.00 per share. NIC has authorized 10 million shares of preference stock with a par value of $1.00 per share. Currently, Series B Nonconvertible Junior Preference Stock ("Series B") and Series D Convertible Junior Preference Stock ("Series D") are outstanding.

The UAW holds the Series B and is currently entitled to elect one member of our Board of Directors. As of October 31, 2018 and 2017, there was one share of Series B Preference stock with a par value of $1.00 per share authorized and outstanding.

At both October 31, 2018 and 2017, there were 70,182 shares of Series D issued and outstanding. These shares were issued with a par value of $1.00 per share, an optional redemption price, and a liquidation preference of $25 per share plus accrued dividends. The Series D stock may be converted into NIC common stock at the holder's option (subject to adjustment in certain circumstances); upon conversion each share of Series D stock is converted to 0.3125 shares of common stock. The Series D stock ranks senior to common stock as to dividends and liquidation and receives dividends at a rate of 120% of the cash dividends on common stock as declared on an as-converted basis.

Common Stock

Changes in shares of common stock and treasury stock were as follows:



(in millions)	Common Stock	Treasury Stock		Shares Outstanding
Balance as of October 31, 2015	86.8	5.3		81.5
Shares issued	—	(0.1	)	0.1
Shares acquired	—	—		—
Balance as of October 31, 2016	86.8	5.2		81.6
Shares issued	16.3	(0.7	)	17.0
Shares acquired	—	0.1		(0.1	)
Balance as of October 31, 2017	103.1	4.6		98.5
Shares issued	—	(0.5	)	0.5
Shares acquired	—	0.1		(0.1	)
Balance as of October 31, 2018	103.1	4.2		98.9

On February 28, 2017, we consummated our previously announced strategic alliance with TRATON Group, which included an equity investment in the Company by TRATON Group pursuant to the Stock Purchase Agreement, the License and Supply Framework Agreement and the Procurement JV Framework Agreement. Pursuant to the TRATON Group Stock Purchase Agreement, on February 28, 2017 we issued and TRATON Group purchased 16.2 million of our shares of common stock for an aggregate purchase price of $256 million at $15.76 per share (an estimated 19.9% stake (16.6% on a fully-diluted basis) in the Company).

Additional Paid in Capital

In accounting for the issuance of the 2018 Convertible Notes, a debt component and an equity component were separated resulting in the debt component being recorded at its estimated fair value without consideration given to the conversion feature. We estimated the fair value of the liability component at $177 million. The resulting equity component of $22 million, net of $1 million of discount, was recorded in Additional paid in capital. Issuance costs were also allocated between the debt and equity components resulting in an immaterial amount being recorded as a reduction in Additional paid in capital. The 2018 Convertible Notes were fully repaid upon maturity in October 2018, and none were converted into our common stock.

In accounting for the issuance of the 2019 Convertible Notes, the debt component and equity component were separated, resulting in the debt component being recorded at its estimated fair value without consideration given to the conversion feature. We estimated the fair value of the liability component at $367 million. The resulting equity component of $44 million was recorded in Additional paid in capital and will not be remeasured as long as it continues to meet the conditions for equity classification. Issuance costs were also allocated between debt and equity components with $1 million being recorded as a reduction in Additional paid in capital.

For more information on our 2018 Convertible Notes and 2019 Convertible Notes, see Note 9, Debt.

Accumulated Other Comprehensive Loss

The following table presents changes in Accumulated other comprehensive loss, net of tax, included in our Consolidated Statements of Shareholders' Deficit:



(in millions)	Unrealized Gain on Marketable Securities		Foreign Currency Translation Adjustments			Defined Benefit Plans			Total
Balance as of October 31, 2017	$	—	$	(283	)	$	(1,928	)	$	(2,211	)
Other comprehensive income (loss) before reclassifications	—		(32		)	201			169
Amounts reclassified out of accumulated other comprehensive loss	—		—			122			122
Net current-period other comprehensive income (loss)	—		(32		)	323			291
Balance as of October 31, 2018	$	—	$	(315	)	$	(1,605	)	$	(1,920	)



(in millions)	Unrealized Gain on Marketable Securities			Foreign Currency Translation Adjustments			Defined Benefit Plans			Total
Balance as of October 31, 2016	$	1		$	(280	)	$	(2,361	)	$	(2,640	)
Other comprehensive income (loss) before reclassifications^(A)	(1		)	(3		)	279			275
Amounts reclassified out of accumulated other comprehensive loss	—			—			154			154
Net current-period other comprehensive income (loss)	(1		)	(3		)	433			429
Balance as of October 31, 2017	$	—		$	(283	)	$	(1,928	)	$	(2,211	)


(A)	Other comprehensive income before reclassifications for Defined Benefit Plans includes a $28 million intraperiod tax allocation and $8 million of deferred tax assets.



(in millions)	Unrealized Gain on Marketable Securities		Foreign Currency Translation Adjustments			Defined Benefit Plans			Total
Balance as of October 31, 2015	$	1	$	(287	)	$	(2,315	)	$	(2,601	)
Other comprehensive income (loss) before reclassifications	—		7			(177		)	(170		)
Amounts reclassified out of accumulated other comprehensive loss	—		—			131			131
Net current-period other comprehensive income (loss)	—		7			(46		)	(39		)
Balance as of October 31, 2016	$	1	$	(280	)	$	(2,361	)	$	(2,640	)

The following table presents the amounts reclassified from Accumulated other comprehensive loss and the affected line item in our Consolidated Statements of Operations:



		For the Years Ended October 31,
	Location in Consolidated Statements of Operations	2018			2017			2016
Defined benefit plans
Amortization of prior service benefit	Selling, general and administrative expenses	$	—		$	—		$	(1	)
Amortization of actuarial loss	Selling, general and administrative expenses	114			138			133
Settlements	Selling, general and administrative expenses	9			—			—
Settlements	Restructuring	—			23			—
	Total before tax	123			161			132
	Income tax expense	(1		)	(7		)	(1		)
Total reclassifications for the period, net of tax		$	122		$	154		$	131

Dividend Restrictions

Under the General Corporation Law of the State of Delaware, dividends may only be paid out of surplus or out of net profits for the year in which the dividend is declared or the preceding year, and no dividend may be paid on common stock at any time during which the capital of outstanding preferred stock or preference stock exceeds our net assets.

Certain debt instruments, including our 6.625% Senior Notes indenture, our Loan Agreement with regard to the Tax Exempt Bonds and our Amended Term Loan Credit Agreement, contain terms that include various negative covenants and restrictions, including, among others, certain limitations on dividends. We have not paid dividends on our common stock since 1980.