EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK
Basic Earnings Per Share
Basic earnings per share from both continuing and discontinued operations are calculated by dividing the respective earnings by the weighted-average number of shares of common stock outstanding during each period.
Diluted Earnings Per Share
Diluted earnings per share includes the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 4.3 million, 4.8 million and 4.8 million shares for the years ended December 31, 2013, 2012 and 2011, respectively. The weighted-average diluted shares outstanding for the years ended December 31, 2012 and 2011, excludes anti-dilutive stock options to purchase approximately 1.8 million and 2.8 million shares, respectively, because such options have exercise prices in excess of the average market price of the company’s common stock during the year. We had no anti-dilutive stock options outstanding for the year ended December 31, 2013.
Share Repurchases
The table below summarizes the company’s share repurchases:
|
| | | | | | | | | | | | | | | | | | | | | |
Repurchase Program
Authorization Date | | Amount
Authorized
(in millions) | | Total Shares Retired (in millions) | | Average
Price
Per Share(2) | | Date Completed | | Shares Repurchased
(in millions) |
|
Year Ended December 31 |
2013 | | 2012 | | 2011 |
June 16, 2010 | |
| $5,350 |
| | 83.7 | |
| $ 63.86 |
| | September 2013 | | 18.6 |
| | 20.9 |
| | 40.2 |
|
May 15, 2013(1) | |
| $4,000 |
| | 8.7 | |
| $103.37 |
| | | | 8.7 |
| | — |
| | — |
|
| | | | | | | | | | 27.3 |
| | 20.9 |
| | 40.2 |
|
| |
(1) | On May 15, 2013, the company's board of directors authorized a share repurchase program of up to $4.0 billion of the company’s common stock. Repurchases under this program commenced in September 2013 upon the completion of the company's 2010 repurchase program. As of December 31, 2013, repurchases under the program totaled $895 million, and $3.1 billion remained under this share repurchase authorization. The repurchase program is expected to expire when we have used all authorized funds for repurchase. |
| |
(2) | Includes commissions paid. |
Share repurchases take place from time to time, subject to market conditions and management's discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and has not made any purchases of common stock other than in connection with these publicly announced repurchase program authorizations.
In connection with the spin-off of our former shipbuilding business, we obtained a Private Letter Ruling from the Internal Revenue Service (IRS) that generally limited our share repurchases to approximately 88 million shares within two years of the spin-off. The limitation expired on March 31, 2013. During this two year period, we repurchased approximately 67 million shares of our common stock.
Dividends on Common Stock
In May 2013, the company increased the quarterly common stock dividend 11 percent to $0.61 per share from the previous amount of $0.55 per share.
In May 2012, the company increased the quarterly common stock dividend 10 percent to $0.55 per share from the previous amount of $0.50 per share.
In May 2011, the company increased the quarterly common stock dividend 6 percent to $0.50 per share from the previous amount of $0.47 per share.
