STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 28, 2020

STOCKHOLDERS’ EQUITY

Repurchases of Common Stock

During the six months ended June 28, 2020, we repurchased 1.4 million shares for $541 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 second quarter. Additionally, during the first quarter of 2020, we 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, in March 2020 we paid $500 million and received an initial delivery of 1.0 million shares of our common stock. Upon final settlement of the ASR agreement in April 2020, we received an additional 0.4 million shares of our common stock for no additional consideration based on the average price paid per share of $347.16, calculated with reference to the volume-weighted average price (VWAP) of our common stock over the term of the agreement, less a negotiated discount.

The total remaining authorization for future common share repurchases under our share repurchase program was $1.8 billion as of June 28, 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 $841 million and $278 million recorded as a reduction to retained earnings during the six months ended June 28, 2020 and June 30, 2019.

Dividends

We declared cash dividends totaling $1.4 billion ($4.80 per share) and $2.0 billion ($7.20 per share) during the quarters and six months ended June 28, 2020, compared to $1.2 billion ($4.40 per share) and $1.9 billion ($6.60 per

share) during the quarters and six months ended June 30, 2019. In June 2020, we declared our 2020 third quarter dividend totaling $671 million ($2.40 per share), which will be paid in September 2020 and in June 2019, we declared our 2019 third quarter dividend totaling $624 million ($2.20 per share), which was paid in September 2019.

Restricted Stock Unit Grants

During the six months ended June 28, 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	—		3		3
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	344		—		344
Amortization of net prior service credits ^(a)	(124)		—		(124)

Other	—		(72)		(72)
Total reclassified from AOCL	220		(72)		148
Total other comprehensive income	220		(69)		151
Balance at June 28, 2020	$	(15,308)	$	(95)	$	(15,403)

Balance at December 31, 2018	$	(14,254)	$	(67)	$	(14,321)
Other comprehensive income before reclassifications	—		13		13
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	574		—		574
Amortization of net prior service credits ^(a)	(120)		—		(120)
Other	—		15		15
Total reclassified from AOCL	454		15		469
Total other comprehensive income	454		28		482
Balance at June 30, 2019	$	(13,800)	$	(39)	$	(13,839)

^(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”). These amounts include $110 million and $227 million, net of tax, for the quarters ended June 28, 2020 and June 30, 2019, which are comprised of the recognition of net actuarial losses of $172 million and $287 million for the quarters ended June 28, 2020 and June 30, 2019 and the amortization of net prior service credits of $62 million and $60 million for the quarters ended June 28, 2020 and June 30, 2019.