Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK

EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK

Basic Earnings Per Share

We calculate basic earnings per share by dividing net 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 4.6 million shares and 4.9 million shares for the three months ended March 31, 2013 and 2012, respectively. The weighted-average diluted shares outstanding for the three months ended March 31, 2013 and 2012, exclude anti-dilutive stock options to purchase approximately 1.3 million shares 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 period.

Share Repurchases

The table below summarizes the company’s share repurchases:

						Shares Repurchased (in millions)
Repurchase Program Authorization Date	Amount Authorized (in millions)		Total Shares Retired (in millions)	Average  Price Per Share(2)		Three Months Ended March 31
						2013	2012
June 16, 2010(1)		$5,350	71.5		$60.07	6.5	4.4

(1) On June 16, 2010, the company's board of directors authorized a share repurchase program of up to $2.0 billion of the company’s common stock. Following this initial authorization, the board of directors increased the remaining repurchase authorization to $4.0 billion in April 2011. After further repurchases reduced the remaining authorization to less than $1 billion, the board of directors again increased the remaining authorization to $2.0 billion in September 2012. As of March 31, 2013, our repurchases under the program totaled $4.3 billion, and $1.0 billion remained under this share repurchase authorization. The repurchase program will expire when we have used all authorized funds for repurchase.

(2) Includes commissions paid.

Share repurchases take place under pre-established programs, depending on market conditions 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 the 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 2012, the company increased the quarterly common stock dividend to $0.55 per share from the previous amount of $0.50 per share.