Quarterly report pursuant to Section 13 or 15(d)

Shareholders' Equity

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Shareholders' Equity
 6 Months Ended
Jun. 30, 2012
Shareholders' Equity [Abstract]  
Shareholders' Equity

10. Shareholders’ Equity

Changes in shareholders’ equity for the six months ended June 30, 2012 were as follows (in thousands):

 

         

Total shareholders’ equity as of December 31, 2011

   $ 560,188  

Net income

     241,530  

Issuance of common shares from exercise of stock options, SARs, restricted stock grants, warrants, and employee stock purchase plan

     10,356  

Excess tax benefit from exercise of stock options, SARs and restricted stock grants

     27,212  

Additional capital from share-based compensation

     12,497  

Repurchases of common shares

     (505,636 ) 

Dividends and dividend equivalents

     (70,310 ) 

Foreign currency translation adjustment, net of income taxes

     (3,924 ) 

Unrealized loss on derivatives, net of income taxes

     (1,194 ) 
   

 

 

  

Total shareholders’ equity as of June 30, 2012

   $ 270,719  
   

 

 

  

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 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 Credit Facility permits payments of dividends as long as no default or event of default exists and the consolidated leverage ratio specified in the Credit Facility is not exceeded.

On February 21, 2012, the Company announced that its board of directors approved a cash dividend of $0.30 per common share in an aggregate amount of $35.2 million that was paid to shareholders on March 22, 2012. On April 30, 2012, the Company announced that its board of directors approved a cash dividend of $0.30 per common share in an aggregate amount of $35.1 million that was paid to shareholders on May 30, 2012.

The aggregate amount of dividends declared and paid during the three months ended June 30, 2012 and 2011 were $35.1 million and $23.9 million, respectively. The aggregate amount of dividends declared and paid during the six months ended June 30, 2012 and 2011 were $70.3 million and $38.7 million, respectively.

 

Share Repurchases

As of June 30, 2012, the Company had a $1 billion share repurchase program that expires on December 2014. The Credit Facility permits the Company to repurchase its common shares as long as no default or event of default exists and the consolidated leverage ratio specified in the Credit Facility is not exceeded. On May 2, 2012, the Company entered into an agreement with Merrill Lynch International to repurchase $427.9 million of its common shares which will complete its current $1 billion share repurchase program by July 2012. Under the terms of the repurchase agreement, the Company paid $427.9 million on May 4, 2012 and the amount is reflected within shareholders’ equity on the Company’s condensed consolidated balance sheet. The Company received 5.3 million of its common shares in June 2012 as described below, and will receive the remainder after completion of the program in July 2012. The total number of common shares ultimately repurchased under the agreement will be determined based generally upon a discounted volume-weighted average share price of the Company’s common shares over the course of the program.

During the three months ended March 31, 2012, the Company repurchased approximately 0.7 million of its common shares through open market purchases at an aggregate cost of approximately $50.0 million or an average cost of $67.24 per share. During the three months ended June 30, 2012, the Company repurchased approximately 5.3 million of its common shares through open market purchases under the repurchase agreement described above at an aggregate cost of approximately $239.0 million or an average cost of $45.05 per share. The average cost per share of shares acquired during the three months ended June 30, 2012 under the repurchase agreement may be subject to change based on the final cumulative discounted volume-weighted average share price which will not be determined until the completion of the program in July 2012. As of June 30, 2012, the remaining authorized capacity under both the Company’s share repurchase program and repurchase agreement with Merrill Lynch International was approximately $188.9 million which was completed in July 2012 as described in Note 13, Subsequent Events.

The Company reflects the aggregate purchase price of its common shares repurchased as a reduction to shareholders’ equity. The Company allocated 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 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.