Changes in shareholders' equity

9 Months Ended

Sep. 29, 2013

Changes in shareholders' equity

Note 11 — 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 29, 2013, 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 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(Shares in thousands)
Basic		41,132		40,890		41,087		40,831
Dilutive effect of share based awards		383		274		383		—
Dilutive effect of 3.875% Convertible Notes and warrants		1,749		347		1,776		—
Diluted		43,264		41,511		43,246		40,831

The 3.875% Convertible Senior Subordinated Notes due 2017 are included in the dilutive net income per share calculation using the treasury stock method only during periods in which the average market price of our common stock is above the applicable conversion price of the Convertible Notes, or $61.32 per share, and, therefore, the impact of conversion would not be anti-dilutive. In these periods, under the treasury stock method, we calculate the number of shares issuable under the terms of these 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 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 purchases of the convertible note hedges are excluded because their impact would be anti-dilutive. The anti-dilutive shares associated with the convertible note hedges are 1.4 million for both the three and nine month periods ended September 29, 2013, and 0.3 million and 0.1 million for the three and nine month periods ended September 30, 2012, respectively. The treasury stock method is applied when the warrants are in-the-money, assuming the proceeds from the exercise of the warrant 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 was 0.3 million for both the three and nine month periods ended September 29, 2013. The warrants had no dilutive impact for the three and nine month periods ended September 30, 2012. The total number of shares that could potentially be included if the warrants were exercised is approximately 7.4 million at September 29, 2013.

Weighted average stock options that were antidilutive and therefore not included in the calculation of earnings per share was approximately 8.0 million and 7.9 million for the three and nine month periods ended September 29, 2013, respectively, and approximately 8.4 million and 9.0 million for the three and nine month periods ended September 30, 2012, respectively.

The following tables provide information relating to the changes in accumulated other comprehensive income (loss), net of tax, for the nine months ended September 29, 2013 and September 30, 2012:

	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	)

	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, 2011	$	(7,257	)	$	(134,548	)	$	(17,548	)	$	(159,353	)
Other comprehensive income (loss) before reclassifications		551			(133	)		10,305			10,723
Amounts reclassified from accumulated other comprehensive income		6,461			3,341			—			9,802
Net current-period other comprehensive income		7,012			3,208			10,305			20,525
Balance at September 30, 2012	$	(245	)	$	(131,340	)	$	(7,243	)	$	(138,828	)

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 29, 2013 and September 30, 2012:

	Three Months Ended						Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(Dollars in thousands)
Gains and losses on cash flow hedges:
Interest Rate Contracts:
Interest expense	$	—		$	3,663		$	—		$	11,057
Foreign Exchange Contracts:
Cost of goods sold		850			13			154			(754	)
Total before tax		850			3,676			154			10,303
Tax expense (benefit)		(158	)		(1,364	)		164			(3,842	)
Net of tax	$	692		$	2,312		$	318		$	6,461
Amortization of pension and other postretirement benefits items:
Actuarial losses/(gains)(1)	$	1,696		$	1,707		$	5,460		$	5,125
Prior-service costs(1)		(4	)		(5	)		(15	)		(17	)
Transition obligation(1)		1			25			4			74
Curtailment charge(1)		—			—			—			111
Settlement charge(1)		—			—			—			(124	)
Total before tax		1,693			1,727			5,449			5,169
Tax expense (benefit)		(604	)		(611	)		(1,952	)		(1,828	)
Net of tax	$	1,089		$	1,116		$	3,497		$	3,341
Total reclassifications, net of tax	$	1,781		$	3,428		$	3,815		$	9,802

(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 13, “Pension and other postretirement benefits” for additional information).