Raytheon 2012 Annual Report Download - page 111

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
103
We account for warranty provision costs incurred under our long-term contracts using the cost-to-cost measure of progress
as contracts costs, as the estimation of these costs is integral in determining the price of the related long-term contracts. The
table above excludes these costs.
Note 12: Stockholders’ Equity
The changes in shares of our common stock outstanding were as follows:
(In millions) 2012 2011 2010
Beginning balance 338.9 359.4 377.9
Warrants exercised —3.3 6.7
Stock plans activity 5.8 4.0 4.6
Stock repurchases (16.6)(27.8)(29.8)
Ending balance 328.1 338.9 359.4
On May 27, 2010, our stockholders approved the Raytheon 2010 Stock Plan pursuant to which we may grant restricted stock
awards, restricted stock units, stock grants, stock options and stock appreciation rights.
In September 2011, our Board of Directors authorized the repurchase of up to an additional $2.0 billion of our outstanding
common stock. At December 31, 2012, we had approximately $1.3 billion remaining under this repurchase program. All
previous repurchase programs had been completed as of December 31, 2012. Share repurchases will take place from time to
time at management’s discretion depending on market conditions.
Stock repurchases also include shares surrendered by employees to satisfy tax withholding obligations in connection with
restricted stock awards, restricted stock units and stock options issued to employees.
Our stock repurchases were as follows:
(In millions) 2012 2011 2010
$ Shares $ Shares $ Shares
Stock repurchased under our stock repurchase programs $ 825 15.9 $ 1,250 27.1 $ 1,450 29.0
Stock repurchased to satisfy tax withholding obligations 37 0.7 36 0.7 46 0.8
Total stock repurchases $ 862 16.6 $ 1,286 27.8 $ 1,496 29.8
In March 2012, our Board of Directors authorized a 16% increase to our annual dividend payout rate from $1.72 to $2.00 per
share. Our Board of Directors declared cash dividends of $2.00, $1.72 and $1.50 per share in 2012, 2011 and 2010, respectively.
On October 4, 2012 our Board of Directors authorized the retirement of all outstanding treasury shares directly held by us.
As a result, all outstanding treasury shares directly held by us were retired in the fourth quarter of 2012, with an offsetting
reduction in common stock for the par value and the remaining amount offset in additional paid-in capital. In addition, our
Board of Directors authorized all future share repurchases to be retired immediately upon repurchase. As a result, all amounts
related to treasury stock have been reclassified into additional paid-in capital on our consolidated balance sheets and
consolidated statements of equity. The cumulative amounts related to prior period treasury stock that have been reclassified
into additional paid-in capital were $8,153 million and $6,900 million at December 31, 2011 and 2010, respectively.