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Equity
9 Months Ended
Sep. 30, 2011
Equity 
Equity

8.  Equity

 

Common Stock

 

During the nine months ended September 30, 2011, the Company issued 225,746 shares of common stock in connection with the exercise of stock options for total proceeds of approximately $9.6 million.

 

Share Based Compensation

 

On August 8, 2011, the Company granted 86,000 shares of restricted stock to certain officers of the Company pursuant to the Amended and Restated Stock Option and Restricted Stock Plan (the “Plan”), which was approved by the shareholders in May 2006. The awards include dividend rights and vest 20% on each anniversary date through 2016. The fair value of the restricted stock granted was $37.29 per share, determined based on the fair value of the Company’s common stock on the grant date.

 

On May 18, 2011, pursuant to the May 2011 Directors Equity Plan, which has been approved by the shareholders, 16,079 shares of restricted stock were automatically granted to the non-employee members of the Board of Directors. The awards include dividend rights and vest immediately upon grant.  The recipients are restricted from trading the restricted stock for one year from date of grant.  The fair value of the restricted stock granted was $52.24 per share, determined based on the closing price of the Company’s common stock on the grant date.

 

On February 23, 2011, pursuant to the Plan, the Company granted 1,037,250 options to acquire its common stock to key employees with an exercise price equal to the fair market value as of the date of the grant. The stock options vest ratably over a period of four years and expire seven years after the date of grant. The fair value of stock options granted of $26.98 per share was estimated using the Black-Scholes option-pricing model with the following assumptions:  Expected life — 4.8 years; Expected volatility — 60.2%; Dividend yield — 0.9%; Risk-free interest rate — 2.2%; Exercise price - $55.73.

 

Share Repurchase Program

 

Under the Company’s current stock repurchase program 7,883,033 shares of common stock remain authorized for repurchase as of September 30, 2011. No shares were repurchased in 2011 or 2010. Repurchased shares are redeemed and treated as authorized but unissued shares.

 

Other Comprehensive (Loss) Income

 

Other comprehensive (loss) income included the following:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(in millions)

 

Net income

 

$

86.3

 

$

49.3

 

$

280.1

 

$

157.1

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

Foreign currency translation (loss) gain

 

(19.8

)

5.4

 

(13.4

)

4.5

 

Unrealized (loss) gain on investments, net of tax

 

(0.3

)

0.1

 

(0.2

)

—

 

Total other comprehensive (loss) income

 

(20.1

)

5.5

 

(13.6

)

4.5

 

Comprehensive income

 

66.2

 

54.8

 

266.5

 

161.6

 

Comprehensive income attributable to noncontrolling interests

 

(1.4

)

(0.6

)

(4.2

)

(2.2

)

Comprehensive income attributable to Reliance

 

$

64.8

 

$

54.2

 

$

262.3

 

$

159.4

 

 

Accumulated Other Comprehensive (Loss) Income

 

Accumulated other comprehensive (loss) income included the following:

 

 

 

September 30,

 

December 31,

 

 

 

2011

 

2010

 

 

 

(in millions)

 

Foreign currency translation gain

 

$

6.9

 

$

20.3

 

Unrealized loss on investments, net of tax

 

(0.4

)

(0.2

)

Minimum pension liability, net of tax

 

(9.8

)

(9.8

)

Total accumulated other comprehensive (loss) income

 

$

(3.3

)

$

10.3

 

 

Foreign currency translation adjustments are not generally adjusted for income taxes as they relate to indefinite investments in foreign subsidiaries. Unrealized loss on investments and minimum pension liability are net of taxes of $0.3 million and $6.6 million, respectively, as of September 30, 2011 and $0.1 million and $6.6 million, respectively, as of December 31, 2010.