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Shareholders' Equity
 12 Months Ended
Dec. 31, 2013
Shareholders' Equity

Note 11 — Shareholders’ equity

The authorized capital of the Company is comprised of 200 million common shares, $1 par value, and 500,000 preference shares. No preference shares have been outstanding during the last three years.

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 December 31, 2013, no shares have been purchased under this Board authorization.

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 for dilutive securities. The difference between basic and diluted weighted average common shares results from the assumption that dilutive stock options were exercised. The following table provides a reconciliation of basic to diluted weighted average shares outstanding:

 

 

  

2013

  

2012

 

  

2011

 

 

  

(Shares in thousands)

 

Basic

 

41,105

 

 

40,859

 

 

 

40,501

 

Dilutive effect of share based awards

 

410

 

 

—

 

 

 

287

 

Dilutive effect of 3.875% Convertible Notes and warrants

 

2,178

 

 

—

 

 

 

13

 

Diluted

 

43,693

 

 

40,859

 

 

 

40,801

 

Weighted average shares that were antidilutive and therefore not included in the calculation of earnings per share were approximately 7.7 million, 9.0 million and 8.8 million for the twelve months ended December 31, 2013, 2012 and 2011, respectively.

Under the terms of the Convertible Notes the Company elected the net settlement method to satisfy its conversion obligation.  Under the net-settlement method, the Company may settle the principal amount of the Convertible Notes in cash and settle the excess conversion value in shares, plus cash in lieu of fractional shares. The excess conversion shares are included in the dilutive net income per share calculation using the treasury stock method during a fiscal quarter following an immediately preceding fiscal quarter in which the last reported sales price of our common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of such preceding fiscal quarter is above the applicable conversion price of the Convertible Notes, or $61.32 per share; the impact of conversion may be 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 1.6 million, 0.3 million for the twelve month periods ended December 31, 2013 and 2012, respectively. The anti-dilutive shares associated with the convertible note hedges for the twelve month period ended December 31, 2011 are nominal. The treasury stock method is applied when the warrants are in-the-money, assuming the proceeds from the exercise of the warrants 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 were 0.6 million for the twelve month period ended December 31, 2013. The warrants had no dilutive impact for the twelve month periods ended December 31, 2012 and 2011. For additional information regarding the convertible notes and convertible note hedge and warrant agreements, see Note 8 to the consolidated financial statements.

The following tables provide information relating to the changes in accumulated other comprehensive income (loss), net of tax, for the twelve months ended December 31, 2013 and 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, 2011

 

$

(7,257

)

 

$

(134,548

)

 

$

(17,548

)

 

$

(159,353

)

Other comprehensive income before reclassifications

 

 

515

 

 

 

2,628

 

 

 

13,138

 

 

 

16,281

 

Amounts reclassified from accumulated other comprehensive income

 

 

6,361

 

 

 

4,663

 

 

 

—

 

 

 

11,024

 

Net current-period other comprehensive income

 

 

6,876

 

 

 

7,291

 

 

 

13,138

 

 

 

27,305

 

Balance at December 31, 2012

 

 

(381

)

 

 

(127,257

)

 

 

(4,410

)

 

 

(132,048

)

Other comprehensive income (loss) before reclassifications

 

 

(549

)

 

 

25,464

 

 

 

(9,408

)

 

 

15,507

 

Amounts reclassified from accumulated other comprehensive income

 

 

930

 

 

 

4,756

 

 

 

—

 

 

 

5,686

 

Net current-period other comprehensive income (loss)

 

 

381

 

 

 

30,220

 

 

 

(9,408

)

 

 

21,193

 

Balance at December 31, 2013

 

$

—

 

 

$

(97,037

)

 

$

(13,818

)

 

$

(110,855

)

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 twelve months ended December 31, 2013 and 2012:

 

 

  

December 31,
2013

 

 

December 31,
2012

 

 

  

(Dollars in thousands)

 

Gains and losses on cash flow hedges:

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

Interest expense

 

$

—

 

 

$

11,057

 

Foreign Currency Exchange Contracts:

 

 

 

 

 

 

 

 

Net Revenue

 

 

—

 

 

 

34

 

Cost of goods sold

 

 

884

 

 

 

(898

)

Total before tax

 

 

884

 

 

 

10,193

 

Tax expense (benefit)

 

 

46

  

 

 

(3,832

)

Net of tax

 

$

930

 

 

$

6,361

 

 

Amortization of pension and other postretirement benefits items (1):

 

 

 

 

 

 

 

 

Actuarial losses

 

$

7,211

 

 

$

7,158

 

Prior-service costs

 

 

(21

)

 

 

(20

)

Transition obligation

 

 

5

 

 

 

97

 

Curtailment charge

 

 

—

 

 

 

(118

)

Settlement charge

 

 

—

 

 

 

106

 

Total before tax

 

 

7,195

 

 

 

7,223

 

Tax benefit

 

 

(2,439

)

 

 

(2,560

)

Net of tax

 

$

4,756

 

 

$

4,663

 

Total reclassifications, net of tax

 

$

5,686

 

 

$

11,024

 

(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 14 to the consolidated financial statements for additional information).