Shareholders' Equity |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| 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 the Company’s 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. On August 1, 2011, the Company announced that its board of
directors approved a cash dividend of $0.20 per common share in an aggregate amount of $23.5
million that was paid to shareholders on August 29, 2011.
The aggregate amount of dividends declared and paid during the three months ended September
30, 2011 and 2010, were $23.5 million and $14.9 million, respectively. The aggregate amount of
dividends declared and paid during the nine months ended September 30, 2011 and 2010, were $62.2
million and $39.0 million, respectively.
Share Repurchases
On April 30, 2009, the Company announced that its board of directors authorized a 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. During the three months
ended September 30, 2011, the Company repurchased approximately 2.8 million of its common shares
through open market purchases at an aggregate cost of approximately $150.0 million or an average
cost of $54.06 per share. As of September 30, 2011, the remaining authorized capacity under the
Company’s share repurchase program was approximately $527.9 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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