Changes in shareholders' equity Changes in shareholders' equity

6 Months Ended

Jun. 28, 2015

Equity [Abstract]

Changes in shareholders' equity

Changes in shareholders’ equity

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 to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average shares outstanding:

	Three Months Ended		Six Months Ended
	June 28, 2015	June 29, 2014	June 28, 2015	June 29, 2014
	(Shares in thousands)
Basic	41,560	41,380	41,514	41,321
Dilutive effect of share-based awards	473	413	470	442
Dilutive effect of 3.875% Convertible Notes and warrants	6,048	4,599	5,704	4,308
Diluted	48,081	46,392	47,688	46,071

Weighted average shares that were antidilutive and therefore not included in the calculation of earnings per share were approximately 5.6 million and 5.7 million for the three and six months ended June 28, 2015, respectively, and approximately 6.4 million and 6.5 million for the three and six months ended June 29, 2014, 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 Convertible Notes is reflected in diluted earnings per share. As described in Note 7, the Company has elected the net settlement method of accounting for these conversions, under which the Company will settle the principal amount of the Convertible Notes in cash, and settle the excess conversion value in shares. As a result, in these periods, under the treasury stock method, the Company calculates 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 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, applicable accounting guidance requires the Company to separately analyze the impact of the warrant agreements on diluted weighted average shares outstanding, while excluding the impact of the convertible note hedge agreements because it would be anti-dilutive. The reductions in diluted shares that would result from including the anti-dilutive impact of the convertible note hedges would have been 3.3 million and 3.2 million for the three and six months ended June 28, 2015, respectively, and 2.7 million and 2.6 million for the three and six months ended June 29, 2014, respectively. 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 exercise 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 2.7 million and 2.5 millionfor the three and six months ended June 28, 2015, respectively, and 1.9 million and 1.7 million for the three and six months ended June 29, 2014, respectively.

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 agreements) exceeds certain levels, which may limit the Company’s ability to repurchase shares under this Board authorization. Through June 28, 2015, no shares have been purchased under this Board authorization.

The following tables provide information relating to the changes in accumulated other comprehensive income (loss), net of tax, for the six months ended June 28, 2015 and June 29, 2014:

	Cash Flow Hedges			Pension and Other Postretirement Benefit Plans			Foreign Currency Translation Adjustment			Accumulated Other Comprehensive (Loss) Income
	(Dollars in thousands)
Balance as of December 31, 2014	$	—		$	(141,744	)	$	(119,151	)	$	(260,895	)
Other comprehensive income (loss) before reclassifications	(922		)	300			(61,893		)	(62,515		)
Amounts reclassified from accumulated other comprehensive (loss) income	163			2,137			—			2,300
Net current-period other comprehensive income (loss)	(759		)	2,437			(61,893		)	(60,215		)
Balance at June 28, 2015	$	(759	)	$	(139,307	)	$	(181,044	)	$	(321,110	)

	Cash Flow Hedges			Pension and Other Postretirement Benefit Plans			Foreign Currency Translation Adjustment			Accumulated Other Comprehensive (Loss) Income
	(Dollars in thousands)
Balance at December 31, 2013	$	—		$	(97,037	)	$	(13,818	)	$	(110,855	)
Other comprehensive income (loss) before reclassifications	233			(256		)	5,222			5,199
Amounts reclassified from accumulated other comprehensive (loss) income	(90		)	1,498			—			1,408
Net current-period other comprehensive income	143			1,242			5,222			6,607
Balance at June 29, 2014	$	143		$	(95,795	)	$	(8,596	)	$	(104,248	)

The following table provides information relating to the reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three and six months ended June 28, 2015 and June 29, 2014:

	Three Months Ended						Six Months Ended
	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
	(Dollars in thousands)
(Gains) losses on foreign exchange contracts:
Cost of goods sold	$	472		$	(52	)	$	263		$	(129	)
Total before tax	472			(52		)	263			(129		)
Tax benefit	(110		)	5			(100		)	39
Net of tax	$	362		$	(47	)	$	163		$	(90	)
Amortization of pension and other postretirement benefit items:
Actuarial losses (1)	$	1,605		$	1,103		$	3,211		$	2,205
Prior-service costs(1)	—			(6		)	—			(11		)
Total before tax	1,605			1,097			3,211			2,194
Tax expense	(564		)	(382		)	(1,074		)	(696		)
Net of tax	$	1,041		$	715		$	2,137		$	1,498
Total reclassifications, net of tax	$	1,403		$	668		$	2,300		$	1,408

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