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Shareholders' Equity
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6 Months Ended |
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Jun. 30, 2011
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| Comprehensive Income And Shareholders' Equity [Abstract] | |
| Shareholders' Equity |
11. Shareholders’ Equity
Dividends
The declaration of future dividends is subject to the discretion of the Company’s board of
directors and will depend upon various factors, including its earnings, financial condition,
restrictions imposed by the New Credit Facility and the terms of any other indebtedness that may be
outstanding, cash requirements, future prospects and other factors deemed relevant by its board of
directors. The New Credit Facility entered into on March 9, 2011, permits payments of dividends as
long as no default or event of default exists and the consolidated leverage ratio specified in the
New Credit Facility is not exceeded.
On February 22, 2011, the Company announced that its board of directors approved a cash
dividend of $0.13 per common share in an aggregate
amount of $14.8 million that was paid to shareholders on March 22, 2011. On May 2, 2011, the
Company announced that its board of directors approved a cash dividend of $0.20
per common share in an aggregate amount of $23.9 million that was paid to shareholders on June 7,
2011.
The aggregate amount of dividends declared and paid during the three months ended June 30,
2011 and 2010 were $23.9 million and $12.0 million, respectively. The aggregate amount of dividends
declared and paid during the six months ended June 30, 2011 and 2010 were $38.7 million and $24.1
million, respectively.
Share Repurchases
On April 30, 2009, the Company announced that its board of directors authorized a new program
for the Company to repurchase up to $300 million of Herbalife common shares during the next two
years, at such times and prices as determined by the Company’s management. On May 3, 2010, the
Company’s board of directors approved an increase to the share repurchase authorization from $300
million to $1 billion. In addition, the Company’s board of directors approved the extension of the
expiration date of the share repurchase program from April 2011
to December 2014. The New Credit Facility permits repurchase of
common shares as long as no default or event of default exists and
the consolidated leverage ratio specified in the New Credit Facility
is not exceeded.
The Company did not repurchase any common shares in the open market during the three months
ended March 31, 2011. During the three months ended June 30, 2011, the Company repurchased
approximately 1.8 million of its common shares through open market purchases at an aggregate cost
of approximately $98.8 million or an average cost of $54.15 per share. As of June 30, 2011, the
remaining authorized capacity under the Company’s share repurchase program was approximately $677.9
million.
The aggregate purchase price of any common shares repurchased is reflected as a reduction to
shareholders’ equity. The Company allocates the purchase price of the repurchased shares as a
reduction to retained earnings, common shares and additional paid-in-capital.
The number of shares issued upon vesting or exercise for certain restricted stock units and
SARs granted, pursuant to the Company’s share-based compensation plans, is net of the minimum
statutory withholding requirements that the Company pays on behalf of its employees. Although
shares withheld are not issued, they are treated as common share repurchases in the Company’s
condensed consolidated financial statements, as they reduce the number of shares that would have
been issued upon vesting. These shares do not count against
the authorized capacity under the Company’s share repurchase
program described above.
Stock Split
On April 28, 2011, the Company’s shareholders approved a 2-for-1 split of the Company’s common
shares. One additional common share was distributed to the Company’s shareholders on or around May 17, 2011,
for each common share held on May 10, 2011. All common shares subject to outstanding equity awards
and warrants, as well as the number of common shares reserved for issuance under the Company’s
share-based compensation plans, were adjusted proportionately.
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