Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Reynolds American Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Accounts payable	221)	179)	142)	185)	187)
Tobacco settlement accruals	2,498)	2,816)	1,819)	1,727)	2,489)
Due to related party	7)	9)	1)	—)	1)
Deferred revenue, related party	66)	33)	32)	48)	42)
Current maturities of long-term debt	501)	506)	450)	—)	60)
Dividends payable on common stock	656)	514)	356)	339)	326)
Payroll and employee benefits	268)	210)	178)	179)	129)
Pension and other postretirement benefits	89)	91)	75)	79)	74)
Marketing and advertising	155)	213)	134)	117)	106)
Excise, franchise and property tax	172)	217)	161)	157)	149)
Tobacco quota buyout	—)	—)	—)	52)	55)
Other	352)	503)	196)	193)	151)
Other current liabilities	1,036)	1,234)	744)	777)	664)
Current liabilities	4,985)	5,291)	3,544)	3,076)	3,769)
Long-term debt, less current maturities	12,664)	16,941)	4,633)	5,099)	5,035)
Long-term deferred income taxes, net	9,607)	10,236)	383)	658)	461)
Long-term retirement benefits, less current portion	1,869)	2,265)	1,997)	1,221)	1,821)
Long-term deferred revenue, related party	39)	—)	—)	—)	—)
Other noncurrent liabilities	220)	239)	117)	181)	214)
Noncurrent liabilities	24,399)	29,681)	7,130)	7,159)	7,531)
Total liabilities	29,384)	34,972)	10,674)	10,235)	11,300)
Common stock	—)	—)	—)	—)	—)
Paid-in capital	18,285)	18,402)	6,200)	6,571)	7,275)
Retained earnings (accumulated deficit)	3,740)	188)	(1,314)	(1,348)	(1,707)
Accumulated other comprehensive loss	(314)	(338)	(364)	(56)	(311)
Shareholders’ equity	21,711)	18,252)	4,522)	5,167)	5,257)
Total liabilities and shareholders’ equity	51,095)	53,224)	15,196)	15,402)	16,557)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

The financial data over the five-year period reveals significant fluctuations and notable trends in both liabilities and equity components.

Current Liabilities: Accounts payable showed a declining trend from 2012 to 2014, dropping from 187 million to 142 million, followed by a recovery to 221 million in 2016. Tobacco settlement accruals decreased sharply in 2013 from 2489 million to 1727 million, then rose again to peak at 2816 million in 2015 before declining to 2498 million in 2016. Dividends payable on common stock consistently increased year over year, reaching 656 million in 2016, nearly doubling from 326 million in 2012. Payroll and employee benefits expenses similarly rose steadily, with an increase from 129 million in 2012 to 268 million in 2016. Other current liabilities showed a substantial increase from 664 million in 2012 to a peak of 1234 million in 2015, before decreasing to 1036 million in 2016. Overall, total current liabilities displayed considerable volatility, increasing significantly in 2015 before a slight decrease in 2016.
Long-term Liabilities: Long-term debt, less current maturities, remained relatively stable around 5000 million from 2012 to 2014 but surged dramatically to 16941 million in 2015 before declining to 12664 million by 2016. Similarly, long-term deferred income taxes, net, rose sharply from 461 million in 2012 to exceed 10,000 million in 2015, maintaining a similar level in 2016. Long-term retirement benefits initially decreased in 2013 but then increased and peaked in 2015 at 2265 million, followed by a decline in 2016. Other noncurrent liabilities fluctuated but maintained a general level below 250 million. The resulting total noncurrent liabilities increased significantly in 2015, pegged against prior years' figures, indicating a major shift in the company's long-term financial obligations.
Total Liabilities: The aggregate liabilities maintained a relatively steady state from 2012 to 2014, around 10,000 to 11,000 million, but escalated sharply in 2015 to nearly 35,000 million before retreating somewhat to approximately 29,400 million in 2016. This major increase in liabilities in 2015 largely stemmed from the spike in long-term debt and deferred income taxes.
Shareholders’ Equity: Shareholders' equity remained relatively stable from 2012 through 2014, fluctuating between approximately 4500 million and 5200 million. However, from 2015 onward, it experienced a pronounced surge, reaching 18,252 million in 2015 and further increasing to 21,711 million in 2016. This rise was supported by a dramatic improvement in retained earnings, which shifted from a deficit position in the earlier years to a positive balance of 3740 million by 2016. Paid-in capital followed a similar pattern, substantially increasing after 2014. The accumulated other comprehensive loss remained negative but relatively stable throughout the period.
Overall Financial Position: The data indicates a period of structural financial change, especially around 2015, characterized by a rapid increase in both liabilities and equity components. This may reflect significant financing activities, restructuring, or other material corporate transactions. Despite the growth in liabilities, shareholders’ equity improved considerably, indicating enhanced value retention or capital infusion. The company's commitments, such as dividends payable and employee-related expenses, generally increased, suggesting rising operational scale or cost shifts. The volatility in tobacco settlement accruals may reflect changing legal or regulatory conditions.

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Reynolds American Inc. (NYSE:RAI)

Balance Sheet: Liabilities and Stockholders’ Equity