Name: Reynolds American Inc. (NYSE:RAI) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

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.

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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 balance sheet demonstrates a period of relative stability between 2012 and 2014, followed by a substantial expansion in both total liabilities and shareholders' equity starting in 2015. Total liabilities and shareholders' equity increased from 15,196 million in 2014 to 53,224 million in 2015, representing a significant scaling of the capital structure.

Current Liabilities Trends: Current liabilities exhibited a general upward trajectory, peaking at 5,291 million in 2015. Tobacco settlement accruals remained a dominant component of current obligations, fluctuating between a low of 1,727 million in 2013 and a high of 2,816 million in 2015. Additionally, current maturities of long-term debt rose sharply in 2014, increasing from negligible amounts in previous years to approximately 501 million by 2016.
Noncurrent Liabilities and Long-Term Debt: A dramatic escalation in noncurrent liabilities is observed in 2015, where the balance rose from 7,130 million to 29,681 million. This surge was primarily driven by long-term debt, which increased from 4,633 million in 2014 to 16,941 million in 2015, before receding to 12,664 million in 2016. Long-term deferred income taxes also experienced a sharp increase, jumping from 383 million in 2014 to 10,236 million in 2015.
Shareholders' Equity and Capital Growth: Shareholders' equity grew substantially from 4,522 million in 2014 to 21,711 million in 2016. This growth is largely attributed to a significant increase in paid-in capital, which rose from 6,200 million in 2014 to 18,402 million in 2015. Furthermore, the company eliminated its accumulated deficit, transitioning from a negative retained earnings balance of -1,314 million in 2014 to a positive balance of 3,740 million by 2016.
Overall Financial Position: The total liabilities reached a peak of 34,972 million in 2015 before moderating to 29,384 million in 2016. The concurrent and massive increase in both long-term debt and paid-in capital during 2015 indicates a major capital infusion or corporate restructuring event that fundamentally altered the scale and composition of the balance sheet.

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