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EQUITY AND SHARE-BASED COMPENSATION | 3 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
EQUITY AND SHARE-BASED COMPENSATION | EQUITY AND SHARE-BASED COMPENSATION Equity Cash Dividends For the three months ended September 30, 2024, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.2625 per Common Share in the aggregate amount of $69.1 million, which we paid during the same period (three months ended September 30, 2023—$0.25 per Common Share in the aggregate amount of $67.0 million). Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued. Treasury Stock From time to time we may provide funds to a third-party agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the three months ended September 30, 2024, 824,414 Common Shares were repurchased on the open market at a cost of $25.0 million for potential settlement of awards under our LTIP or other plans as described below (three months ended September 30, 2023—1,400,000 Common Shares were purchased for $53.1 million). During the three months ended September 30, 2024, we delivered to eligible participants 60,887 Common Shares that were purchased in the open market in connection with the settlement of awards and other plans (three months ended September 30, 2023—183,313 Common Shares). Employee Stock Purchase Plan (ESPP) Our ESPP offers employees the opportunity to purchase our Common Shares at a purchase price discount of 15%. During the three months ended September 30, 2024, 389,302 Common Shares were eligible for issuance to employees enrolled in the ESPP (three months ended September 30, 2023—286,772 Common Shares). During the three months ended September 30, 2024, cash in the amount of $9.9 million was received from employees relating to the ESPP (three months ended September 30, 2023—$8.6 million). Share Repurchase Plan On April 30, 2024, the Board authorized a share repurchase plan (Fiscal 2024 Repurchase Plan) pursuant to which we were authorized to purchase for cancellation, in open market transactions from time to time over the 12-month period commencing on May 7, 2024 until May 6, 2025, up to $250 million of our Common Shares. The Fiscal 2024 Repurchase Plan included a normal course issuer bid to provide means to execute purchases over the Toronto Stock Exchange (TSX). On July 31, 2024, in order to align our share repurchase plan to our fiscal year, the Board approved the early termination of the Fiscal 2024 Repurchase Plan and authorized a new share repurchase plan (the Fiscal 2025 Repurchase Plan), pursuant to which we may purchase for cancellation in open market transactions, from time to time over the 12-month period commencing on August 7, 2024 until August 6, 2025, if considered advisable, up to an aggregate of $300 million of our Common Shares on the TSX, NASDAQ and/or alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules. The price that we are authorized to pay for Common Shares in open market transactions is the market price at the time of purchase or such other price as is permitted by applicable law or stock exchange rules. The Fiscal 2025 Repurchase Plan will be effected in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the Exchange Act), and includes a normal course issuer bid to provide means to execute purchases over the TSX. During the three months ended September 30, 2024, we repurchased and cancelled 2,649,131 Common Shares for $86.5 million, inclusive of 2% Canadian excise taxes recorded (three months ended September 30, 2023— nil Common Shares for nil). Share-Based Compensation Share-based compensation expense for the periods indicated below is detailed as follows:
| Three Months Ended September 30,
| 2024 |  | 2023
Stock Options (issued under Stock Option Plans) | $ | 2,736 |  |  | $ | 4,544 |
Performance Share Units (issued under LTIP) | 7,188 |  |  | 5,889 |
Restricted Share Units (issued under LTIP) | 3,767 |  |  | 2,881 |
Restricted Share Units (other) | 13,285 |  |  | 21,372 |
Deferred Share Units (directors) | 845 |  |  | 914 |
Employee Stock Purchase Plan | 1,737 |  |  | 1,495 |
Total share-based compensation expense | $ | 29,558 |  |  | $ | 37,095 |
A summary of unrecognized compensation cost for unvested share-based compensation awards is as follows:
| As of September 30, 2024
| Unrecognized Compensation Cost |  | Weighted Average Recognition Period (years)
Stock Options (issued under Stock Option Plans) | $ | 44,523 |  |  | 2.56
Performance Share Units (issued under LTIP) | 71,320 |  |  | 2.10
Restricted Share Units (issued under LTIP) | 29,316 |  |  | 1.79
Restricted Share Units (other) | 48,582 |  |  | 1.57
Total unrecognized share-based compensation cost | $ | 193,741 |  |  |
Stock Options A summary of activity under our stock option plans for the three months ended September 30, 2024 is as follows:
| Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value
Outstanding at June 30, 2024 | 12,207,412 |  |  | $ | 38.51 |  |  | 4.31 |  | $ | 6,142 |
Granted | 1,559,170 |  |  | 28.49 |  |  |  |  |
Exercised | (5,250) |  |  | 26.81 |  |  |  |  |
Forfeited or expired | (904,810) |  |  | 37.57 |  |  |  |  |
Outstanding at September 30, 2024 | 12,856,522 |  |  | $ | 37.36 |  |  | 4.44 |  | $ | 20,135 |
Exercisable at September 30, 2024 | 4,966,126 |  |  | $ | 41.71 |  |  | 3.01 |  | $ | 829 |
As of September 30, 2024, 4,364,407 options to purchase Common Shares were available for issuance under our stock option plans. We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. For the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows:
| Three Months Ended September 30,
| 2024 |  | 2023
Weighted–average fair value of options granted | $ | 5.77 |  |  | $ | 9.16 |
Weighted-average assumptions used: |  |  |
Expected volatility | 28.60 | % |  | 30.93 | %
Risk–free interest rate | 3.66 | % |  | 4.44 | %
Expected dividend yield | 3.51 | % |  | 2.66 | %
Expected life (in years) | 4.31 |  | 4.24
Forfeiture rate (based on historical rates) | 7 | % |  | 7 | %
Average exercise share price | $ | 28.49 |  |  | $ | 36.79 |
Long-Term Incentive Plans We incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three-year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. The Performance Conditions for vesting of the outstanding PSUs are based on market conditions or performance-based revenue conditions. RSUs are employee service-based awards and vest subject to an eligible employee’s continued employment throughout the applicable vesting period. PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. We estimate the fair value of PSUs with market-based conditions using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. The fair value of PSUs with performance-based conditions have been valued based upon their grant date fair value. Beginning in Fiscal 2023, certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants. Performance Share Units (Issued Under LTIP) PSUs (issued under LTIP) vest after three years from the respective date of grants and upon the achievement of Performance Conditions determined at the time of the grant. A summary of activity under our PSUs issued under the LTIP for the three months ended September 30, 2024 is as follows:
| Units |  | Weighted-Average Grant Date Fair Value |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000's)
Outstanding at June 30, 2024 | 1,605,116 |  |  | $ | 56.09 |  |  | 1.70 |  | $ | 48,218 |
Granted (1) | 879,649 |  |  | 47.63 |  |  |  |  |
Forfeited or expired | (104,924) |  |  | 52.18 |  |  |  |  |
Outstanding at September 30, 2024 | 2,379,841 |  |  | $ | 53.07 |  |  | 2.10 |  | $ | 78,547 |
______________________ (1)PSUs are earned based on market or performance conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent. For the periods indicated, the weighted-average fair value of market-based PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:
| Three Months Ended September 30,
| 2024 |  | 2023
Weighted–average fair value of performance share units granted | $ | 47.96 |  |  | $ | 59.48 |
Weighted-average assumptions used: |  |  |
Expected volatility | 30.26 | % |  | 28.05 | %
Risk–free interest rate | 3.67 | % |  | 4.38 | %
Expected dividend yield | — | % |  | — | %
Expected life (in years) | 3.11 |  | 3.11
Restricted Share Units (Issued Under LTIP) Beginning in Fiscal 2025, grants of RSUs (issued under LTIP) vest on a straight-line basis over three years from the respective date of grants. Grants of RSUs (issued under LTIP) prior to Fiscal 2025 vest after three years from the respective date of grants. A summary of activity under our RSUs issued under the LTIP for the three months ended September 30, 2024 is as follows:
| Units |  | Weighted-Average Grant Date Fair Value |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000's)
Outstanding at June 30, 2024 | 956,325 |  |  | $ | 39.61 |  |  | 1.77 |  | $ | 28,728 |
Granted | 633,191 |  |  | 28.56 |  |  |  |  |
Forfeited or expired | (46,901) |  |  | 37.70 |  |  |  |  |
Outstanding at September 30, 2024 | 1,542,615 |  |  | $ | 35.12 |  |  | 2.21 |  | $ | 50,914 |
Restricted Share Units (Other) In addition to the grants made in connection with the LTIPs discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two or four years from the respective date of grants. A summary of activity under our RSUs (other) issued for the three months ended September 30, 2024 is as follows:
| Units |  | Weighted-Average Grant Date Fair Value |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000's)
Outstanding at June 30, 2024 | 4,555,955 |  |  | $ | 35.87 |  |  | 1.79 |  | $ | 136,861 |
Granted | 22,031 |  |  | 32.15 |  |  |  |  |
Vested | (60,887) |  |  | 31.77 |  |  |  |  |
Forfeited or expired | (150,483) |  |  | 37.10 |  |  |  |  |
Outstanding at September 30, 2024 | 4,366,616 |  |  | $ | 35.87 |  |  | 1.55 |  | $ | 144,120 |
Deferred Share Units (DSUs) The DSUs are granted to certain non-employee directors. DSUs are issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board. A summary of activity under our DSUs issued for the three months ended September 30, 2024 is as follows:
| Units |  | Weighted-Average Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000's)
Outstanding at June 30, 2024 (1) | 1,082,471 |  |  | $ | 30.67 |  |  | 0.42 |  | $ | 32,517 |
Granted | 12,326 |  |  | 31.70 |  |  |  |  |
Outstanding at September 30, 2024 (2) | 1,094,797 |  |  | $ | 30.68 |  |  | 0.25 |  | $ | 36,134 |
______________________ (1) Includes 47,871 unvested DSUs. (2) Includes 49,709 unvested DSUs.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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