Stockholders' Equity

6 Months Ended

Mar. 28, 2015

Stockholders' Equity

Stockholders' Equity

12.Stockholders’ Equity

Stock Repurchase Program

At various times during fiscal 2012, 2013, and 2014, Keurig’s Board of Directors authorized the Company to repurchase a total of $2.5 billion of the Company’s common stock (the “repurchase program”).  Under this program, the Company may purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934) or in privately negotiated transactions.

Under its repurchase program, on February 28, 2014, the Company entered into an accelerated share repurchase (“ASR”) agreement with a major financial institution (“Bank”).  The ASR allowed the Company to buy a large number of shares immediately at a purchase price determined by an average market price over a period of time.  Under the ASR, the Company agreed to purchase $700.0 million of its common stock, in total, with an initial delivery to the Company of 4,340,508 shares of the Company’s common stock by the Bank.  In the second quarter of fiscal 2015, the purchase period for the ASR ended and an additional 1,489,476 shares were delivered to the Company.  In total, 5,829,984 shares were repurchased under the ASR at an average repurchase price of $120.07 per share.  The shares were retired in the quarters they were delivered, and the up-front payment of $700.0 million was accounted for as a reduction to stockholders’ equity in the Company’s Consolidated Balance Sheet in the second quarter of fiscal 2014.

On March 3, 2015, the Company, under its repurchase program, completed the repurchase of 5,231,991 shares of common stock from Luigi Lavazza S.p.A. (“Lavazza”) for an aggregate purchase price of $623.6 million.  The price per share was $119.18, which represented a 3.0% discount off the closing price of the Company’s common stock on February 20, 2015, which was the business day immediately preceding the entry into the stock repurchase agreement between the Company and Lavazza.

As of March 28, 2015 the Company had $264.5 million remaining under the repurchase program.

Summary of share repurchase activity under the repurchase program:

	Twenty-six weeks ended
	March 28, 2015		Fiscal 2014(1)
Number of shares acquired on the open market	2,318,964		3,798,084
Average price per share of open market acquired shares	$	127.12	$	92.79
Number of shares acquired from Lavazza	5,231,991		—
Average price per share of Lavazza acquired shares	$	119.18	$	—
Number of shares under February 2014 ASR	1,489,476		4,340,508
Average price per share of ASR shares(2)	$	120.07	N/A
Total cost of acquired shares (in thousands)	$	918,356	$	1,052,430

(1) Total cost of acquired shares in fiscal 2014 includes initial purchase price of $700 million under the ASR.

(2) Average price per share for total shares repurchased under February 2014 ASR.

Accumulated Other Comprehensive Income (Loss)

The following tables provide the changes in the components of accumulated other comprehensive income (loss), net of tax (in thousands):

	Thirteen weeks ended									Thirteen weeks ended
	March 28, 2015									March 29, 2014
							Accumulated									Accumulated
							Other									Other
	Cash Flow						Comprehensive			Cash Flow						Comprehensive
	Hedges			Translation			Income (Loss)			Hedges			Translation			Income (Loss)
Balance, beginning of period	$	8,389		$	(92,797	)	$	(84,408	)	$	(7,328	)	$	(36,925	)	$	(44,253	)
Other comprehensive gain (loss), before reclassifications	446			(77,423		)	(76,977		)	11,274			(20,302		)	(9,028		)
Amounts reclassified from accumulated other comprehensive income (loss)	(4,223		)	—			(4,223		)	688			—			688
Foreign currency exchange impact on cash flow hedges	(1		)	—			(1		)	(4		)	4			—
Net current period other comprehensive loss	(3,778		)	(77,423		)	(81,201		)	11,958			(20,298		)	(8,340		)
Balance, end of period	$	4,611		$	(170,220	)	$	(165,609	)	$	4,630		$	(57,223	)	$	(52,593	)
	Twenty-six weeks ended									Twenty-six weeks ended
	March 28, 2015									March 29, 2014
							Accumulated									Accumulated
							Other									Other
	Cash Flow						Comprehensive			Cash Flow						Comprehensive
	Hedges			Translation			Income (Loss)			Hedges			Translation			Income (Loss)
Balance, beginning of period	$	8,952		$	(63,003	)	$	(54,051	)	$	(7,150	)	$	(12,035	)	$	(19,185	)
Other comprehensive gain (loss), before reclassifications	214			(107,217		)	(107,003		)	10,923			(45,192		)	(34,269		)
Amounts reclassified from accumulated other comprehensive income (loss)	(4,552		)	—			(4,552		)	861			—			861
Foreign currency exchange impact on cash flow hedges	(3		)	—			(3		)	(4		)	4			—
Net current period other comprehensive loss	(4,341		)	(107,217		)	(111,558		)	11,780			(45,188		)	(33,408		)
Balance, end of period	$	4,611		$	(170,220	)	$	(165,609	)	$	4,630		$	(57,223	)	$	(52,593	)

The unfavorable translation adjustment change during the thirteen and twenty-six weeks ended March 28, 2015 was primarily due to the continuing weakening of the Canadian dollar against the U.S. dollar.  See also Note 9, Derivative Financial Instruments.

Common Stock Dividends

During the second quarter of fiscal 2015, the Company declared a quarterly dividend of $0.2875 per common share, or $44.3 million in the aggregate, payable on April 30, 2015 to shareholders of record on March 31, 2015.  During the thirteen and twenty-six weeks ended March 28, 2015, the Company paid dividends of approximately $46.6 million and $87.2 million, respectively.

On April 24, 2015, the Company’s Board of Directors declared the Company’s next regular quarterly cash dividend of $0.2875 per common share, payable on July 30, 2015, to shareholders of record as of the close of business on June 30, 2015.