STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 29, 2019

STOCKHOLDERS’ EQUITY

Repurchases of Common Stock

During the nine months ended September 29, 2019, we repurchased 2.2 million shares of our common stock for $718 million, some of which was settled subsequent to the end of the third quarter. The total remaining authorization for future common share repurchases under our share repurchase program was $3.3 billion as of September 29, 2019 including a $1.0 billion increase to the program authorized by our Board of Directors on September 26, 2019. 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 $350 million and $523 million recorded as a reduction to retained earnings during the nine months ended September 29, 2019 and September 30, 2018.

Dividends

We declared cash dividends totaling $679 million ($2.40 per share) and $2.6 billion ($9.00 per share) during the quarter and nine months ended September 29, 2019. During the quarter ended September 29, 2019, we declared our fourth quarter dividend of $2.40 per share, an increase of $0.20 over the third quarter 2019 dividend, which was declared during the second quarter of 2019. Our fourth quarter dividend will be paid in December 2019. We declared cash dividends totaling $1.2 billion ($4.20 per share) and $2.3 billion ($8.20 per share) during the quarter and nine months ended September 30, 2018. Dividends declared during the quarter ended September 30, 2018 include the declaration of our third and fourth quarter dividends of $569 million ($2.00 per share) and $632 million ($2.20 per share).

Restricted Stock Unit Grants

During the nine months ended September 29, 2019, we granted certain employees approximately 0.6 million RSUs with a weighted average grant date fair value of $305.04 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, 2018	$	(14,254	)	$	(67	)	$	(14,321	)
Other comprehensive income before reclassifications	—			(30		)	(30		)
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	861			—			861
Amortization of net prior service credits ^(a)	(180		)	—			(180		)
Other	—			17			17
Total reclassified from AOCL	681			17			698
Total other comprehensive income	681			(13		)	668
Balance at September 29, 2019	$	(13,573	)	$	(80	)	$	(13,653	)

Balance at December 31, 2017	$	(12,559	)	$	20		$	(12,539	)
Other comprehensive loss before reclassifications	—			(53		)	(53		)
Amounts reclassified from AOCL
Recognition of net actuarial losses ^(a)	1,092			—			1,092
Amortization of net prior service credits ^(a)	(192		)	—			(192		)
Other	—			23			23
Total reclassified from AOCL	900			23			923
Total other comprehensive income (loss)	900			(30		)	870
Reclassification of income tax effects from tax reform^(b)	(2,396		)	(12		)	(2,408		)
Balance at September 30, 2018	$	(14,055	)	$	(22	)	$	(14,077	)

^(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 7 – Postretirement Benefit Plans”). These amounts include $227 million and $300 million, net of tax, for the quarters ended September 29, 2019 and September 30, 2018, which are comprised of the recognition of net actuarial losses of $287 million and $364 million for the quarters ended September 29, 2019 and September 30, 2018 and the amortization of net prior service credits of $(60) million and $(64) million for the quarters ended September 29, 2019 and September 30, 2018.

^(b)

Upon adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) during the first quarter of 2018, we reclassified the impact of the income tax effects related to the Tax Cuts and Jobs Act (the Tax Act) from AOCL to retained earnings by the same amount with zero impact to total equity.