RAYTHEON CO/ | 2013 | FY | 3


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.

Earnings Per Share (EPS)
EPS from continuing operations attributable to Raytheon Company common stockholders and unvested share-based payment awards was as follows:
 
2013

 
2012

 
2011

Basic EPS attributable to Raytheon Company common stockholders:
 
 
 
 
 
Distributed earnings
$
2.19

 
$
1.98

 
$
1.71

Undistributed earnings
3.78

 
3.69

 
3.54

Total
$
5.97

 
$
5.67

 
$
5.25

Diluted EPS attributable to Raytheon Company common stockholders:
 
 
 
 
 
Distributed earnings
$
2.18

 
$
1.98

 
$
1.70

Undistributed earnings
3.78

 
3.67

 
3.52

Total
$
5.96

 
$
5.65

 
$
5.22


 
Basic and diluted EPS from discontinued operations attributable to Raytheon Company common stockholders and unvested share-based payment awards were earnings of $0.20, a loss of less than of $0.01 and earnings of $0.05 for 2013, 2012 and 2011, respectively.
Income attributable to participating securities was as follows:
(In millions)
2013

 
2012

 
2011

Income from continuing operations attributable to participating securities
$
38

 
$
36

 
$
31

Income (loss) from discontinued operations, net of tax attributable to participating securities(1)
1

 

 

Net income attributable to participating securities
$
39

 
$
36

 
$
31

(1)
Income (loss) from discontinued operations, net of tax attributable to participating securities was a loss of less than $1 million for 2012 and income of less than $1 million for 2011.

The weighted-average shares outstanding for basic and diluted EPS were as follows: 
(In millions)
2013

 
2012

 
2011

Shares for basic EPS (including 6.4 participating securities for 2013, 6.3 for 2012, and 5.8 for 2011)
323.4

 
333.2

 
351.7

Dilutive effect of stock options and LTPP
0.8

 
1.0

 
1.4

Dilutive effect of warrants

 

 
0.5

Shares for diluted EPS
324.2

 
334.2

 
353.6



There were no stock options with exercise prices greater than the average market price (anti-dilutive) that were excluded from our calculation of diluted EPS in 2013, 2012 and 2011. Stock options to purchase the following number of shares of common stock had exercise prices that were less than the average market price (dilutive) of our common stock and were included in our calculations of diluted EPS: 
(In millions)
2013

 
2012

 
2011

Stock options included in the calculation of EPS (dilutive)
0.1

 
0.9

 
4.4


 
Our Board of Directors is authorized to issue up to 200 million shares of preferred stock, $0.01 par value per share, in multiple series with terms as determined by them. There were no shares of preferred stock outstanding at December 31, 2013 and December 31, 2012.

Warrants to purchase shares of our common stock with an exercise price of $37.50 per share, were included in our calculations of diluted EPS at December 31, 2011. These warrants expired in June 2011.

us-gaap:StockholdersEquityNoteDisclosureTextBlock