NOTE 9 – STOCKHOLDERS’ EQUITY

Repurchases of Common Stock

During the six months ended June 25, 2017, we repurchased 3.8 million shares of our common stock for $1.0 billion. The total remaining authorization for future common share repurchases under our share repurchase program was $2.5 billion as of June 25, 2017. 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 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 $828 million and $838 million recorded as a reduction of retained earnings during the six months ended June 25, 2017 and June 26, 2016, respectively.

Dividends

We declared cash dividends totaling $1.1 billion ($3.64 per share) and $1.6 billion ($5.46 per share) during the quarter and six months ended June 25, 2017. The 2017 dividend amounts include the declaration of our 2017 third quarter dividend of $1.82 per share, which totaled $528 million. We declared cash dividends totaling $1.0 billion ($3.30 per share) and $1.5 billion ($4.95 per share) during the quarter and six months ended June 26, 2016. The 2016 dividend amounts include the declaration of our 2016 third quarter dividend of $1.65 per share, which totaled $503 million.

Restricted Stock Unit Grants

During the six months ended June 25, 2017, we granted certain employees approximately 0.5 million RSUs with a grant date fair value of $254.53 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, 2016		$	(11,981)			$	(121)			$	(12,102)
Other comprehensive income before reclassifications			3				53				56
Amounts reclassified from AOCL
Recognition of net actuarial losses (a)			516				—				516
Amortization of net prior service credits (a)			(114)				—				(114)
Other			—				7				7
Total reclassified from AOCL			402				7				409
Total other comprehensive income			405				60				465
Balance at June 25, 2017		$	(11,576)			$	(61)			$	(11,637)
Balance at December 31, 2015		$	(11,314)			$	(130)			$	(11,444)
Other comprehensive loss before reclassifications			—				(7)				(7)
Amounts reclassified from AOCL
Recognition of net actuarial losses (a)			469				—				469
Amortization of net prior service credits (a)			(123)				—				(123)
Other			—				1				1
Total reclassified from AOCL			346				1				347
Total other comprehensive income (loss)			346				(6)				340
Balance at June 26, 2016		$	(10,968)			$	(136)			$	(11,104)

 

(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 Plans”). These amounts include $200 million and $173 million, net of tax, for the quarters ended June 25, 2017 and June 26, 2016, which are comprised of the recognition of net actuarial losses of $258 million and $235 million for the quarters ended June 25, 2017 and June 26, 2016 and the amortization of net prior service credits of $(58) million and $(62) million for the quarters ended June 25, 2017 and June 26, 2016.