Raytheon 2013 Annual Report Download - page 106

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
96
Activity related to product warranty accruals was as follows:
(In millions) 2013 2012 2011
Beginning balance $ 33 $ 38 $ 43
Provisions for warranties 35 4
Warranty services provided (6)(10)(9)
Ending balance $ 30 $ 33 $ 38
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 11: Stockholders’ Equity
The changes in shares of our common stock outstanding were as follows:
(In millions) 2013 2012 2011
Beginning balance 328.1 338.9 359.4
Warrants exercised —— 3.3
Stock plans activity 2.4 5.8 4.0
Stock repurchases (16.0)(16.6)(27.8)
Ending balance 314.5 328.1 338.9
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 $2.0 billion of our outstanding common stock.
Additionally, in November 2013, our Board of Directors authorized the repurchase of up to an additional $2.0 billion of our
outstanding common stock. At December 31, 2013, we had approximately $2.3 billion available under these repurchase
programs. Stock 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) 2013 2012 2011
$ Shares $ Shares $ Shares
Stock repurchased under our stock repurchase programs $ 1,075 15.2 $ 825 15.9 $ 1,250 27.1
Stock repurchased to satisfy tax withholding obligations 48 0.8 37 0.7 36 0.7
Total stock repurchases $ 1,123 16.0 $ 862 16.6 $ 1,286 27.8
In the fourth quarter of 2012, all outstanding treasury shares directly held by us were retired, 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, including those to satisfy tax withholding obligations, to be retired
immediately upon repurchase.
In March 2013, our Board of Directors authorized a 10% increase to our annual dividend payout rate from $2.00 to $2.20 per
share. Our Board of Directors declared dividends of $2.20, $2.00 and $1.72 per share in 2013, 2012 and 2011, respectively.
Dividends are subject to quarterly approval by our Board of Directors.