STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 28, 2021

STOCKHOLDERS’ EQUITY

Repurchases of Common Stock

During the quarter ended March 28, 2021, we entered into an accelerated share repurchase (ASR) agreement to repurchase $1.0 billion of our common stock through April 14, 2021. Under the terms of the ASR agreement, we paid $1.0 billion and received an initial delivery of 1.9 million shares of our common stock. Subsequent to our first quarter, upon final settlement of the ASR agreement on April 14, 2021, we received an additional 1.0 million shares of our common stock for no additional consideration based on the average price paid per share of $348.69, 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 $2.0 billion as of March 28, 2021. 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. During the quarter ended March 28, 2021, we repurchased 1.9 million of our common shares, which were recognized as a reduction to common stock for the par value with the excess purchase price recorded as a reduction of additional paid-in capital of $227 million and $771 million recorded as a reduction to retained earnings. During the quarter ended March 29, 2020, due to the volume of repurchases made under our share repurchase program, 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.

Dividends

We declared cash dividends totaling $725 million ($2.60 per share) and $677 million ($2.40 per share) during the quarters ended March 28, 2021 and March 29, 2020. Dividends paid during the quarters ended March 28, 2021 and March 29, 2020 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 which primarily occurs in the first quarter each year.

Restricted Stock Unit Grants

During the quarter ended March 28, 2021, we granted certain employees approximately 0.6 million RSUs with a weighted average grant date fair value of $341.53 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, 2020	$	(16,155)	$	34	$	(16,121)
Other comprehensive loss before reclassifications	—		(26)		(26)
Amounts reclassified from AOCL
Recognition of net actuarial losses (a)	204		—		204
Amortization of net prior service credits (a)	(64)		—		(64)

Other	—		(1)		(1)
Total reclassified from AOCL	140		(1)		139
Total other comprehensive income (loss)	140		(27)		113
Balance at March 28, 2021	$	(16,015)	$	7	$	(16,008)

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 (loss)	110		(97)		13
Balance at March 29, 2020	$	(15,418)	$	(123)	$	(15,541)

(a)Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit income for each period presented (see “Note 7 - Postretirement Benefit Plans”).