Net Income Per Share and Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Net Income Per Share and Stockholders' Equity

Net Income Per Share and Shareholders' Equity

Net income per share. The components of basic and diluted net income per share attributable to common shareholders are as follows:


	Three Months Ended March 31,
		2024		2023
		(in millions, except per share data)
Net income attributable to common shareholders		$	1,095	$	1,222
Participating share-based earnings (a)		(2)		(3)
Basic net income attributable to common shareholders		1,093		1,219

Adjustment to after-tax interest expense to reflect the dilutive impact attributable to Convertible Notes		—		1
Diluted net income attributable to common shareholders		$	1,093	$	1,220

Basic weighted average shares outstanding		234		235

Convertible Notes (b)		5		9
Diluted weighted average shares outstanding		239		244

Net income per share attributable to common shareholders:
Basic		$	4.68	$	5.19
Diluted		$	4.57	$	5.00

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(a)Unvested Equity Awards and Liability Awards represent participating securities because they participate in non-forfeitable dividends with the common equity owners of the Company. Participating share-based earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested Equity Awards and Liability Awards do not participate in undistributed net losses as they are not contractually obligated to do so. The dilutive effect of the reallocation of participating share-based earnings to diluted net income attributable to common shareholders was negligible.

(b)Diluted weighted average common shares outstanding includes the dilutive effect had the Company's Convertible Notes been converted as of the beginning of the three months ended March 31, 2024 and 2023, respectively. If converted by the holder, the Company may settle in cash, Company's common shares or a combination thereof, at the Company's election. See Note 6 for additional information.

Shareholders' equity. The Company's return of capital strategies include payments of dividends and a share repurchase program. The Board, at its sole discretion, may change its dividend practices and/or the Company's share repurchase program based on the Company's outlook for commodity prices, liquidity, debt levels, capital resources, quarterly operating cash flows or other factors, including terms set forth in the Merger Agreement. Dividends declared by the Board and shares repurchased during the period are presented in the Company's consolidated statements of equity as dividends declared and purchases of treasury shares, respectively. Dividends paid and shares repurchased during the period are presented as cash used in financing activities in the Company's consolidated statements of cash flows. Dividends that are declared and have not been paid, if any, are included in other current liabilities in the consolidated balance sheets. Share repurchases are included as treasury shares in the consolidated balance sheets.

Dividends. Dividends declared by the Board are as follows:


	Base		Variable		Total		Total
	(per share)		(per share)		(per share)		(in millions)
2024:
First quarter	$	1.25	$	1.31	$	2.56	$	603




2023:
First quarter	$	1.10	$	4.48	$	5.58	$	1,314

The Company can provide no assurance that dividends will be authorized or declared in the future or as to the amount of any future dividends. The Merger Agreement provides certain restrictions on future base and variable dividend declarations, including an agreement that the Company will no longer declare a variable dividend after distributing the variable dividend attributable to the fourth quarter 2023 results.

Share repurchase programs. In April 2023, the Board authorized a $4 billion common share repurchase program to replace the $4 billion common share repurchase program authorized in February 2022. As was the case with previous share repurchase programs, the Company may repurchase shares in accordance with applicable securities laws or pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934 (the "Exchange Act"), which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company's insider trading policy.

Expenditures to acquire shares under the share repurchase programs are as follows:


	Three Months Ended March 31,
		2024		2023
		(in millions)
Shares repurchased (a)		$	—	$	500

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(a)The Company repurchased 2.4 million shares during the three months ended March 31, 2023. Expenditures for share repurchases exclude the one percent IRA excise tax.

With limited exceptions, the Merger Agreement precludes the Company from future repurchases or acquisition of the Company's common shares, including repurchases under the Company's share repurchase program.