Stockholders’ Equity

6 Months Ended

Jun. 30, 2020

Stock Repurchase Program

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash.

In January 2019, our Board authorized a $4.0 billion stock repurchase program and in January 2020, our Board authorized an additional $5.0 billion stock repurchase program. These stock repurchase programs have no expiration from the date of authorization.

On February 13, 2020, we entered into accelerated share repurchase agreements (the “ASR Agreements”) with each of three financial institutions (each an “ASR Counterparty”), as part of our share repurchase program. Under the ASR Agreements, we paid an aggregate amount of $3.0 billion to the ASR Counterparties and received an initial delivery of approximately 69 million shares of our common stock, which shares were recorded as a $2.55 billion increase to treasury stock. The final number of shares to be repurchased will be based on the volume-weighted average stock price of our common stock during the terms of the agreements, less a discount. This is evaluated as an unsettled forward contract indexed to our own stock, with $450 million classified within stockholders’ equity. At final settlement, each ASR Counterparty may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to make a cash payment or deliver shares of our common stock to the applicable ASR Counterparty, with the method of settlement at our election.

The stock repurchase activity under our stock repurchase programs during the six months ended June 30, 2020 is summarized as follows (in millions, except per share amounts):


	Shares Repurchased ⁽¹⁾	Average Price per Share ⁽²⁾		Value of Shares Repurchased ⁽²⁾		Remaining Amount Authorized
Balance as of January 1, 2020						$	2,151
Authorization of additional plan in January 2020						5,000
Repurchase of shares of common stock	29	$	34.30	$	998	(998)
Accelerated share repurchases ⁽³⁾	69			$	2,550	(2,550)
Unsettled forward contract for share repurchase	—			$	450	(450)
Balance as of June 30, 2020						$	3,153

(1)These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. None of the repurchased shares of common stock have been retired.

(2)Excludes broker commissions.

(3)As indicated above, under the ASR Agreements, we paid an aggregate amount of $3.0 billion to the ASR Counterparties and received an initial delivery of 69 million shares of our common stock. Pursuant to the terms of the ASR Agreements, the final number of shares and the average purchase price will be determined at the end of the applicable purchase periods.

In July 2020, the ASR Agreements settled and resulted in approximately 74 million shares repurchased at an average price per share of $40.77.

Dividends

The Company paid a total of $112 million and $226 million in cash dividends during the three and six months ended June 30, 2020, respectively, and $120 million and $245 million in cash dividends during the three and six months ended June 30, 2019, respectively. In July 2020, our Board of Directors declared a cash dividend of $0.16 per share of common stock to be paid on September 18, 2020 to stockholders of record as of September 1, 2020.