General Dynamics 2013 Annual Report Download - page 52

Our financing arrangements contain a number of customary
covenants and restrictions. We were in compliance with all material
covenants on December 31, 2013.
K. OTHER LIABILITIES
A summary of significant other liabilities by balance sheet caption
follows:
December 31 2012 2013
Salaries and wages $ 835 $ 807
Workers’ compensation 578 497
Retirement benefits 318 303
Deferred income taxes 173 298
Other (a) 1,205 1,457
Total other current liabilities $ 3,109 $ 3,362
Retirement benefits $ 5,671 $ 3,076
Customer deposits on commercial contracts 849 677
Deferred income taxes 144 137
Other (b) 727 955
Total other liabilities $ 7,391 $ 4,845
(a) Consists primarily of dividend payable, taxes payable, environmental remediation reserves,
warranty reserves, liabilities of discontinued operations and insurance-related costs.
(b) Consists primarily of liabilities for warranty reserves and workers’ compensation and
liabilities of discontinued operations.
The increase in the December 31, 2013, other current liabilities
amount is primarily due to $198 of dividends payable. We did not have
any dividends payable on December 31, 2012, because we paid our
first quarter 2013 dividend in December 2012. The decrease in the
December 31, 2013, noncurrent retirement benefits amount is due to
improvement in the funded status of our defined-benefit retirement
plans. See Note E for further discussion of deferred tax balances and
Note P for further discussion of retirement benefits.
L. SHAREHOLDERS’ EQUITY
Authorized Stock. Our authorized capital stock consists of
500 million shares of $1 per share par value common stock and
50 million shares of $1 per share par value preferred stock. The
preferred stock is issuable in series, with the rights, preferences and
limitations of each series to be determined by our board of directors.
Shares Issued and Outstanding. On December 31, 2012, we
had 481,880,634 shares of common stock issued and 353,674,248
shares of common stock outstanding. On December 31, 2013, we had
481,880,634 shares of common stock issued and 353,402,794
shares of common stock outstanding, including unvested restricted
stock of 1,947,273 shares. No shares of our preferred stock were
outstanding on either date. The only changes in our shares outstanding
during 2013 resulted from share activity under our equity compensation
plans (see Note O for further discussion) and shares repurchased in the
open market. In 2013, we repurchased 9.4 million shares at an average
price of $78 per share.
On October 2, 2013, with 1.4 million shares remaining under a prior
authorization, the board of directors authorized management to
repurchase an additional 10 million shares. On December 31, 2013,
approximately 11.4 million shares remained authorized for repurchase,
about 3 percent of our total shares outstanding. All of these shares were
subsequently repurchased in January 2014 through an ASR agreement
with a financial institution. See Note A for further discussion of the ASR
and the subsequent authorization by the board of directors to repurchase
20 million additional shares of common stock on the open market.
Dividends per Share. Dividends declared per share were $1.88 in
2011, $2.04 in 2012 and $2.24 in 2013. Cash dividends paid were
$673 in 2011, $893 in 2012 and $591 in 2013. In advance of possible
tax increases in 2013, we accelerated our first quarter 2013 dividend
payment to December 2012.
Other Comprehensive Income (Loss). The tax effect for each
component of other comprehensive income (loss) (OCL) consisted of the
following:
Year Ended December 31, 2011
Gross
Amount
Benefit
(Provision) for
Income Tax
Net
Amount
Losses on cash flow hedges $ (81) $ 22 $ (59)
Unrealized losses on securities (1) – (1)
Foreign currency translation adjustments (89) 18 (71)
Change in retirement plans’ funded status (1,129) 384 (745)
Other comprehensive loss $ (1,300) $ 424 $ (876)
Year Ended December 31, 2012
Gross
Amount
Benefit
(Provision) for
Income Tax
Net
Amount
Losses on cash flow hedges $ (23) $ 3 $ (20)
Unrealized gains on securities 6 (2) 4
Foreign currency translation adjustments 141 130 271
Change in retirement plans’ funded status (1,149) 431 (718)
Other comprehensive loss $ (1,025) $ 562 $ (463)
Year Ended December 31, 2013
Gross
Amount
Benefit
(Provision) for
Income Tax
Net
Amount
Gains on cash flow hedges $ 3 $ – $ 3
Unrealized gains on securities 12 (4) 8
Foreign currency translation adjustments (118) – (118)
Change in retirement plans’ funded status 2,595 (898) 1,697
Other comprehensive income $ 2,492 $ (902) $ 1,590
48 General Dynamics Annual Report 2013