VALERO ENERGY CORP/TX | 2013 | FY | 3

13.
EQUITY
Share Activity
For the years ended December 31, 2013, 2012, and 2011, activity in the number of shares of common stock and treasury stock was as follows (in millions):
 
Common
Stock
 
Treasury
Stock
Balance as of December 31, 2010
673

 
(105
)
Transactions in connection with
   stock-based compensation plans:
 
 
 
Stock issuances
—

 
5

Stock repurchases
—

 
(17
)
Balance as of December 31, 2011
673

 
(117
)
Transactions in connection with
   stock-based compensation plans:
 
 
 
Stock issuances
—

 
6

Stock repurchases
—

 
(6
)
Stock repurchases under buyback program
—

 
(4
)
Balance as of December 31, 2012
673

 
(121
)
Transactions in connection with
   stock-based compensation plans:
 
 
 
Stock issuances
—

 
6

Stock repurchases
—

 
(6
)
Stock repurchases under buyback program
—

 
(17
)
Balance as of December 31, 2013
673

 
(138
)


Preferred Stock
We have 20 million shares of preferred stock authorized with a par value of $0.01 per share. No shares of preferred stock were outstanding as of December 31, 2013 and 2012.
Treasury Stock
We purchase shares of our common stock in open market transactions to meet our obligations under employee stock-based compensation plans. We also purchase shares of our common stock from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions.
On February 28, 2008, our board of directors approved a $3 billion common stock purchase program, which is in addition to the remaining amount under a $6 billion program previously authorized. This additional $3 billion program has no expiration date. During 2013, we completed the $6 billion program. During the years ended December 31, 2013 and 2012, we purchased $692 million and $118 million, respectively, of our common stock under our programs. There were no stock repurchases under the buyback program during the year ended December 31, 2011. As of December 31, 2013, we have approvals under the $3 billion program to purchase approximately $2.6 billion of our common stock. In January 2014, we purchased 4 million shares for $208 million.
Common Stock Dividends
On January 22, 2014, our board of directors declared a quarterly cash dividend of $0.25 per common share payable March 12, 2014 to holders of record at the close of business on February 12, 2014.
Income Tax Effects Related to Components of Other Comprehensive Income
The following table reflects the tax effects allocated to each component of other comprehensive income for the years ended December 31, 2013, 2012, and 2011 (in millions):
 
Before-Tax Amount
 
Tax Expense (Benefit)
 
Net Amount
Year Ended December 31, 2013:
 
 
 
 
 
Foreign currency translation adjustment
$
(98
)
 
$
—

 
$
(98
)
Pension and other postretirement benefits:
 
 
 
 
 
Gain arising during the year related to:
 
 
 
 
 
Net actuarial gain
367

 
125

 
242

Plan amendments
371

 
130

 
241

(Gain) loss reclassified into income related to:
 
 
 
 
 
Net actuarial loss
57

 
20

 
37

Prior service credit
(33
)
 
(12
)
 
(21
)
Settlement
1

 
—

 
1

Net gain on pension and other
postretirement benefits
763

 
263

 
500

Derivative instruments designated and
qualifying as cash flow hedges:
 
 
 
 
 
Net loss arising during the year
(4
)
 
(2
)
 
(2
)
Net loss reclassified into income
2

 
1

 
1

Net loss on cash flow hedges
(2
)
 
(1
)
 
(1
)
Other comprehensive income
$
663

 
$
262

 
$
401

 
Before-Tax Amount
 
Tax Expense (Benefit)
 
Net Amount
Year Ended December 31, 2012:
 
 
 
 
 
Foreign currency translation adjustment
$
164

 
$
—

 
$
164

Pension and other postretirement benefits:
 
 
 
 
 
Loss arising during the year related to:
 
 
 
 
 
Net actuarial loss
(228
)
 
(79
)
 
(149
)
Prior service cost
(9
)
 
(3
)
 
(6
)
(Gain) loss reclassified into income related to:
 
 
 
 
 
Net actuarial loss
34

 
12

 
22

Prior service credit
(20
)
 
(7
)
 
(13
)
Settlement
12

 
—

 
12

Net loss on pension and other
postretirement benefits
(211
)
 
(77
)
 
(134
)
Derivative instruments designated and
qualifying as cash flow hedges:
 
 
 
 
 
Net gain arising during the year
45

 
16

 
29

Net gain reclassified into income
(73
)
 
(26
)
 
(47
)
Net loss on cash flow hedges
(28
)
 
(10
)
 
(18
)
Other comprehensive income (loss)
$
(75
)
 
$
(87
)
 
$
12

Year Ended December 31, 2011:
 
 
 
 
 
Foreign currency translation adjustment
$
(122
)
 
$
—

 
$
(122
)
Pension and other postretirement benefits:
 

 
 
 
 
Loss arising during the year related to:
 
 
 
 
 
Net actuarial loss
(285
)
 
(100
)
 
(185
)
Prior service cost
(4
)
 
(1
)
 
(3
)
(Gain) loss reclassified into income related to:
 
 
 
 
 
Net actuarial loss
14

 
4

 
10

Prior service credit
(21
)
 
(7
)
 
(14
)
Settlement
4

 
1

 
3

Net loss on pension and other
postretirement benefits
(292
)
 
(103
)
 
(189
)
Derivative instruments designated and
qualifying as cash flow hedges:
 

 
 
 
 
Net gain arising during the year
32

 
11

 
21

Net gain reclassified into income
(3
)
 
(1
)
 
(2
)
Net gain on cash flow hedges
29

 
10

 
19

Other comprehensive loss
$
(385
)
 
$
(93
)
 
$
(292
)


Accumulated Other Comprehensive Income
Changes in accumulated other comprehensive income by component, net of tax, were as follows (in millions):
 
Foreign
Currency
Translation
Adjustment
 
Defined
Benefit
Pension
Items
 
Gains and
(Losses) on
Cash Flow
Hedges
 
Total
Balance as of December 31, 2010
$
623

 
$
(235
)
 
$
—

 
$
388

Other comprehensive income (loss)
(122
)
 
(189
)
 
19

 
(292
)
Balance as of December 31, 2011
501

 
(424
)
 
19

 
96

Other comprehensive income (loss)
164

 
(134
)
 
(18
)
 
12

Balance as of December 31, 2012
665

 
(558
)
 
1

 
108

Other comprehensive income (loss)
before reclassifications
(98
)
 
483

 
(2
)
 
383

Amounts reclassified from
accumulated other comprehensive
income (loss)
—

 
17

 
1

 
18

Net other comprehensive income
(loss)
(98
)
 
500

 
(1
)
 
401

Separation of retail business
(159
)
 
—

 
—

 
(159
)
Balance as of December 31, 2013
$
408

 
$
(58
)
 
$
—

 
$
350


Gains (losses) reclassified out of accumulated other comprehensive income (loss) and into net income were as follows (in millions):
Details about
Accumulated Other
Comprehensive Income
 (Loss) Components
 
Year Ended December 31, 2013
 
Affected Line
Item in the
Statement of
Income
Amortization of items related to
defined benefit pension plans:
 
 
 
 
Net actuarial loss
 
$
(57
)
 
(a)
Prior service credit
 
33

 
(a)
Settlement
 
(1
)
 
(a)
 
 
(25
)
 
Total before tax
 
 
8

 
Tax benefit
 
 
$
(17
)
 
Net of tax
 
 
 
 
 
Losses on cash flow hedges:
 
 
 
 
Commodity contracts
 
$
(2
)
 
Cost of sales
 
 
(2
)
 
Total before tax
 
 
1

 
Tax benefit
 
 
$
(1
)
 
Net of tax
 
 
 
 
 
Total reclassifications for the year
 
$
(18
)
 
Net of tax
_________________________
(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost, as further discussed in Note 14. Net periodic benefit cost is reflected in operating expenses and general and administrative expenses.

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