Shareholders' equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' equity

Shareholders' equity

The authorized capital of the Company is comprised of 200 million common shares, $1 par value, and 500,000 preference shares. No preference shares have been outstanding during the last four years.

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 generation 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 agreement) exceeds certain levels, which may limit the Company’s ability to repurchase shares under this Board authorization. Through December 31, 2014, no shares have been purchased under this Board authorization.

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased for dilutive securities. The following table provides a reconciliation of basic to diluted weighted average shares outstanding:

	2014	2013	2012
	(Shares in thousands)
Basic	41,366	41,105	40,859
Dilutive effect of share based awards	450	410	—
Dilutive effect of 3.875% Convertible Notes and warrants	4,654	2,178	—
Diluted	46,470	43,693	40,859

Weighted average shares that were antidilutive and therefore not included in the calculation of earnings per share were approximately 6.3 million, 7.7 million and 9.0 million for the twelve months ended December 31, 2014, 2013 and 2012, respectively.

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, the impact of conversion would be dilutive and the dilutive effect of conversion of the Convertibles Notes is reflected in diluted earnings per share. As previously noted in Note 8, the Company has elected the net settlement method of accounting for these conversions and as a result, in these periods, under the treasury stock method, the Company calculates the number of shares issuable under the terms of these notes based on the average market price of the stock during the period, and includes 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 the Company separately analyzes the impact of the convertible note hedge and the impact of the warrant agreements on diluted weighted average shares outstanding, the effect of the convertible note hedges are disregarded because their impact would be anti-dilutive. The reductions in diluted shares that would result from the convertible note hedges are 2.7 million, 1.6 million, and 0.3 million for the twelve month periods ended December 31, 2014, 2013 and 2012, respectively. The treasury stock method is applied when the warrants are in-the-money, assuming 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 1.9 million and 0.6 million for the twelve month periods ended December 31, 2014 and 2013, respectively. The warrants had no dilutive impact for the twelve month period ended December 31, 2012. For additional information regarding the convertible notes and convertible note hedge and warrant agreements, see Note 8 to the consolidated financial statements.

The following tables provide information relating to the changes in accumulated other comprehensive income (loss), net of tax, for the twelve months ended December 31, 2014 and 2013:

	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	(549		)	25,464			(9,408		)	15,507
Amounts reclassified from accumulated other comprehensive income (loss)	930			4,756			—			5,686
Net current-period other comprehensive income (loss)	381			30,220			(9,408		)	21,193
Balance at December 31, 2013	—			(97,037		)	(13,818		)	(110,855		)
Other comprehensive income (loss) before reclassifications	594			(47,536		)	(105,333		)	(152,275		)
Amounts reclassified from accumulated other comprehensive income (loss)	(594		)	2,829			—			2,235
Net current-period other comprehensive loss	—			(44,707		)	(105,333		)	(150,040		)
Balance at December 31, 2014	$	—		$	(141,744	)	$	(119,151	)	$	(260,895	)

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 twelve months ended December 31, 2014 and 2013:

	December 31, 2014			December 31, 2013
	(Dollars in thousands)
Gains and losses on foreign exchange contracts:
Cost of goods sold	(705		)	884
Total before tax	(705		)	884
Taxes	111			46
Net of tax	$	(594	)	$	930
Amortization of pension and other postretirement benefits items (1):
Actuarial losses	$	4,385		$	7,211
Prior-service costs	(21		)	(21		)
Transition obligation	—			5
Total before tax	4,364			7,195
Tax benefit	(1,535		)	(2,439		)
Net of tax	$	2,829		$	4,756
Total reclassifications, net of tax	$	2,235		$	5,686

(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 14 to the consolidated financial statements  for additional information).