STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 29, 2020

STOCKHOLDERS’ EQUITY

Repurchases of Common Stock

During the quarter ended March 29, 2020, we repurchased 0.7 million shares for $264 million under repurchase plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, some of which were settled subsequent to the end of the first quarter. We also entered into an accelerated share repurchase (ASR) agreement to repurchase $500 million of our common stock through April 2020. Under the terms of the ASR agreement, we made a payment of $500 million and received an initial delivery of 1.0 million shares of our common stock. The total number of shares of common stock to be received is based on an average volume-weighted average price (VWAP) of our common stock during the term of the ASR agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement. Based on the average VWAP as of April 20, 2020, we expect to receive approximately 0.5 million additional shares upon final settlement.

The total remaining authorization for future common share repurchases under our share repurchase program was $2.0 billion as of March 29, 2020. As we repurchase our common shares, we reduce common stock for the $1 of par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction of additional paid-in capital. If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings. Due to the volume of repurchases and the prices at which these were made, additional paid-in capital was reduced to zero, with the remainder of the excess purchase price over par value of $733 million recorded as a reduction to retained earnings during the quarter ended March 29, 2020.

Dividends

We declared cash dividends totaling $677 million ($2.40 per share) and $623 million ($2.20 per share) during the quarters ended March 29, 2020 and March 31, 2019. Dividends paid during the quarters ended March 29, 2020 and

March 31, 2019 are higher than dividends declared due to dividend-equivalents paid to holders of RSUs and PSUs. These dividend-equivalents are accrued during the vesting period and are paid upon the vesting of the RSUs and PSUs.

Restricted Stock Unit Grants

During the quarter ended March 29, 2020, we granted certain employees approximately 0.5 million RSUs with a weighted average grant date fair value of $384.17 per RSU. The grant date fair value of these RSUs is equal to the closing market price of our common stock on the grant date less a discount to reflect the delay in payment of dividend-equivalent cash payments that are made only upon vesting, which is generally three years from the grant date. We recognize the grant date fair value of RSUs, less estimated forfeitures, as compensation expense ratably over the requisite service period, which is shorter than the vesting period if the employee is retirement eligible on the date of grant or will become retirement eligible before the end of the vesting period.

Accumulated Other Comprehensive Loss

Changes in the balance of AOCL, net of tax, consisted of the following (in millions):



	Postretirement Benefit Plans			Other, net			AOCL
Balance at December 31, 2019	$	(15,528	)	$	(26	)	$	(15,554	)
Other comprehensive income before reclassifications	—			5			5
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	172			—			172
Amortization of net prior service credits ^(a)	(62		)	—			(62		)
Other	—			(102		)	(102		)
Total reclassified from AOCL	110			(102		)	8
Total other comprehensive income	110			(97		)	13
Balance at March 29, 2020	$	(15,418	)	$	(123	)	$	(15,541	)

Balance at December 31, 2018	$	(14,254	)	$	(67	)	$	(14,321	)
Other comprehensive income before reclassifications	—			(5		)	(5		)
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	287			—			287
Amortization of net prior service credits ^(a)	(60		)	—			(60		)
Other	—			5			5
Total reclassified from AOCL	227			5			232
Total other comprehensive income	227			—			227
Balance at March 31, 2019	$	(14,027	)	$	(67	)	$	(14,094	)

^(a)

Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “Note 6 – Postretirement Benefit Plans”).