Changes in shareholders' equity Changes in shareholders' equity

9 Months Ended

Sep. 28, 2014

Equity [Abstract]

Changes in shareholders' equity

Changes in shareholders’ equity

In 2007, the Company’s Board of Directors authorized the repurchase of up to $300 million of outstanding Company common stock. Repurchases of Company stock under the Board authorization may be made from time to time in the open market and may include privately-negotiated transactions as market conditions warrant and subject to regulatory considerations. The stock repurchase program has no expiration date and the Company’s ability to execute on the program will depend on, among other factors, cash requirements for acquisitions, cash generated from operations, debt repayment obligations, market conditions and regulatory requirements. In addition, under the Company’s senior credit agreements, the Company is subject to certain restrictions relating to its ability to repurchase shares in the event the Company’s consolidated leverage ratio (generally, the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as defined in the senior credit agreements) exceeds certain levels, which may limit the Company’s ability to repurchase shares under this Board authorization. Through September 28, 2014, no shares have been purchased under this Board authorization.

The following table provides a reconciliation of basic to diluted weighted average shares outstanding:

	Three Months Ended		Nine Months Ended
	September 28, 2014	September 29, 2013	September 28, 2014	September 29, 2013
	(Shares in thousands)
Basic	41,399	41,132	41,347	41,087
Dilutive effect of share-based awards	440	383	441	383
Dilutive effect of 3.875% Convertible Notes and warrants	4,789	1,749	4,468	1,776
Diluted	46,628	43,264	46,256	43,246

Weighted average shares that were antidilutive and therefore not included in the calculation of earnings per share were approximately 6.3 million and 6.4 million for the three and nine months ended September 28, 2014 respectively, and approximately 8.0 million and 7.9 million for the three and nine months ended September 29, 2013, respectively.

The Convertible Notes are included in the diluted net income per share calculation during periods in which the average market price of the Company's common stock is above the applicable conversion price of the Convertible Notes, or $61.32 per share, and, therefore, the impact of conversion would be dilutive. In these periods, under the treasury stock method, we calculate the number of shares issuable under the terms of the Convertible Notes based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period.

In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge and warrant agreements. The convertible note hedge economically reduces the dilutive impact of the Convertible Notes. However, because applicable accounting guidance requires the Company to separately analyze the impact of the convertible note hedge agreements and the impact of the warrant agreements on diluted weighted average shares outstanding, the impact of the convertible note hedge agreements are excluded from the calculation of earnings per share because it would be anti-dilutive. The anti-dilutive shares associated with the convertible note hedges are 2.8 million and 2.7 million for the three and nine months ended September 28, 2014, respectively and 1.4 millionfor both the three and nine months ended September 29, 2013. The treasury stock method is applied when the warrants are in-the-money and assumes the proceeds from the exercise of the warrants are used to repurchase shares based on the average stock price during the period. The strike price of the warrants is approximately $74.65 per share of common stock. Shares issuable upon exercise of the warrants that were included in the total diluted shares outstanding were 2.0 million and 1.8 million for the three and nine months ended September 28, 2014, respectively and 0.3 million or both the three and nine months ended September 29, 2013.

For additional information regarding the convertible notes and convertible note hedge and warrant agreements see Note 8 to the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2013.

The following tables provide information relating to the changes in accumulated other comprehensive income (loss), net of tax, for the nine months ended September 28, 2014 and September 29, 2013:

	Cash Flow Hedges			Pension and Other Postretirement Benefit Plans			Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
	(Dollars in thousands)
Balance as of December 31, 2013	$	—		$	(97,037	)	$	(13,818	)	$	(110,855	)
Other comprehensive income (loss) before reclassifications	641			131			(41,133		)	(40,361		)
Amounts reclassified from accumulated other comprehensive income (loss)	(438		)	2,205			—			1,767
Net current-period other comprehensive income (loss)	203			2,336			(41,133		)	(38,594		)
Balance at September 28, 2014	$	203		$	(94,701	)	$	(54,951	)	$	(149,449	)

	Cash Flow Hedges			Pension and Other Postretirement Benefit Plans			Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
	(Dollars in thousands)
Balance at December 31, 2012	$	(381	)	$	(127,257	)	$	(4,410	)	$	(132,048	)
Other comprehensive income (loss) before reclassifications	(370		)	(762		)	(9,018		)	(10,150		)
Amounts reclassified from accumulated other comprehensive income (loss)	318			3,497			—			3,815
Net current-period other comprehensive income (loss)	(52		)	2,735			(9,018		)	(6,335		)
Balance at September 29, 2013	$	(433	)	$	(124,522	)	$	(13,428	)	$	(138,383	)

The following table provides information relating to the reclassifications of losses/(gain) in accumulated other comprehensive income into expense/(income), net of tax, for the three and nine months ended September 28, 2014 and September 29, 2013:

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(Dollars in thousands)
(Gains) losses on foreign exchange contracts:
Cost of goods sold	$	(397	)	$	850		$	(526	)	$	154
Total before tax	(397		)	850			(526		)	154
Tax benefit	49			(158		)	88			164
Net of tax	$	(348	)	$	692		$	(438	)	$	318
Amortization of pension and other postretirement benefit items:
Actuarial losses/(gains) (1)	$	1,090		$	1,696		$	3,295		$	5,460
Prior-service costs(1)	(5		)	(4		)	(16		)	(15		)
Transition obligation(1)	—			1			—			4
Total before tax	1,085			1,693			3,279			5,449
Tax expense	(378		)	(604		)	(1,074		)	(1,952		)
Net of tax	$	707		$	1,089		$	2,205		$	3,497
Total reclassifications, net of tax	$	359		$	1,781		$	1,767		$	3,815

(1) These accumulated other comprehensive income components are included in the computation of net benefit cost of pension and other postretirement benefit plans (see Note 12 for additional information).