Shareholders' equity

3 Months Ended

Apr. 02, 2017

Equity [Abstract]

Shareholders' equity

Note 10 — 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
	April 2, 2017	March 27, 2016
	(Shares in thousands)
Basic	44,893	41,647
Dilutive effect of share-based awards	821	519
Dilutive effect of 3.875% Convertible Notes and warrants (1)	901	6,616
Diluted	46,615	48,782

(1) The reduction in the dilutive effect of the Convertible Notes and warrants at April 2, 2017 as compared to March 27, 2016 is due to the Company’s repurchase of Convertible Notes and conversions by holders of the Convertible Notes subsequent to March 27, 2016.

Weighted average shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.5 million and 5.2 million for the three months ended April 2, 2017 and March 27, 2016, respectively.

In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge and warrant agreements. The convertible note hedge, consisting of call options held by the Company, economically reduces the dilutive impact of the Convertible Notes. However, applicable accounting guidance requires the Company to separately address the dilutive impact of the warrants issued under the warrant agreements in computing diluted weighted average shares outstanding, without giving effect to the anti-dilutive impact of the call options. The reduction in the number of diluted shares that would result from giving effect to the anti-dilutive impact of the call options would have been 0.5 million and 3.6 million for the three months ended April 2, 2017 and March 27, 2016, respectively. The treasury stock method is applied to the warrants because the average market price of the Company's common stock during the reporting periods presented exceeds the warrant exercise price of $74.65 per share, and assumes the proceeds from the exercise of the warrants are used by the Company to repurchase shares based on such average market price. Shares issuable upon exercise of the warrants that were included in the total diluted shares outstanding were 0.4 millionand 3.0 million for the three months ended April 2, 2017 and March 27, 2016, respectively.

The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the three months ended April 2, 2017 and March 27, 2016:

	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, 2016	$	(2,424	)	$	(136,596	)	$	(299,697	)	$	(438,717	)
Other comprehensive income (loss) before reclassifications	350			(241		)	46,982			47,091
Amounts reclassified from accumulated other comprehensive income	1,378			1,131			—			2,509
Net current-period other comprehensive income	1,728			890			46,982			49,600
Balance as of April 2, 2017	$	(696	)	$	(135,706	)	$	(252,715	)	$	(389,117	)

	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, 2015	$	(2,491	)	$	(138,887	)	$	(229,746	)	$	(371,124	)
Other comprehensive (loss) before reclassifications	(50		)	182			20,476			20,608
Amounts reclassified from accumulated other comprehensive loss	1,530			1,056			—			2,586
Net current-period other comprehensive income	1,480			1,238			20,476			23,194
Balance at March 27, 2016	$	(1,011	)	$	(137,649	)	$	(209,270	)	$	(347,930	)

The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three months ended April 2, 2017 and March 27, 2016:

	Three Months Ended
	April 2, 2017			March 27, 2016
	(Dollars in thousands)
Losses on foreign exchange contracts:
Cost of goods sold	$	1,645		$	1,871
Total before tax	1,645			1,871
Tax benefit	(267		)	(341		)
Net of tax	$	1,378		$	1,530
Amortization of pension and other postretirement benefit items:
Actuarial losses (1)	$	1,726		$	1,622
Prior-service costs(1)	29			14
Total before tax	1,755			1,636
Tax benefit	(624		)	(580		)
Net of tax	$	1,131		$	1,056
Total reclassifications, net of tax	$	2,509		$	2,586

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

Mezzanine Equity

As of December 31, 2016, the Company reclassified $1.8 million from additional paid-in capital to convertible notes in the mezzanine equity section of the Company's consolidated balance sheet. The reclassified amount represents the aggregate difference between the principal amount and the carrying value of the Convertible Notes purchased by the Company pursuant to the Exchange Transactions (see "3.875% Convertible Senior Subordinated Notes - Exchange Transactions" within Note 7) under agreements that were entered into prior to December 31,2016, but not consummated until January 5, 2017. No reclassification was required as of April 2, 2017.