Stockholder's Equity, Equity-Based Compensation Expense and Earnings Per Share Stockholder's Equity, Equity-Based Compensation Expense and Earnings Per Share
 3 Months Ended
Mar. 29, 2015
Disclosure of Stockholder's Equity, Equity-Based Compensation Expense and Earnings Per Share [Abstract]  
Stockholder's Equity, Equity-Based Compensation Expense and Earnings Per Share
olders' Equity, Equity-Based Compensation Expense and Earnings Per Share

Equity-based Compensation

The Company has two long-term incentive programs: The 2007 Stock Incentive Plan and the 2013 Omnibus Incentive Plan. Prior to March 28, 2013, Peak Holdings, the former parent of the Company, also had the 2007 Unit Plan, which was terminated in connection with the Company's IPO. Equity-based compensation expense recognized during the period is based on the value of the portion of equity-based payment awards that is ultimately expected to vest during the period. As equity-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The authoritative guidance for equity compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Expense Information

The following table summarizes equity-based compensation expense which was allocated as follows:

 
Three months ended
 
March 29, 2015
 
March 30, 2014
Cost of products sold
$
1,293

 
$
197

Marketing and selling expenses
514

 
271

Administrative expenses
1,544

 
1,603

Research and development expenses
118

 
41

Pre-tax equity-based compensation expense
3,469

 
2,112

Income tax benefit
(1,272
)
 
(698
)
Net equity-based compensation expense
$
2,197

 
$
1,414




2007 Stock Incentive Plan

The Company adopted an equity option plan (the “2007 Stock Incentive Plan”) providing for the issuance of the Company's common stock through the granting of nonqualified stock options. As a result of the Liquidity Event, the majority of the outstanding equity options became exercisable. Any unvested awards vest ratably over five years from the date of grant. Subsequent to the adoption of the 2013 Omnibus Incentive Plan (as further described below), there will be no more grants under the 2007 Stock Incentive Plan.

2007 Unit Plan

Peak Holdings, the former parent of the Company, adopted an equity plan (the “2007 Unit Plan”) providing for the issuance of profit interest units ("PIUs") in Peak Holdings. In connection with the Company's IPO, Peak Holdings was dissolved resulting in the termination of the 2007 Unit Plan and the adoption of the 2013 Omnibus Incentive Plan (as further described below). As a result of the dissolution, the assets of Peak Holdings were distributed to the unit holders of Peak Holdings. As the sole assets of Peak Holdings were shares of the Company's common stock, units were converted into shares of common stock. The number of shares of common stock delivered to the equity holder as a result of the conversion had the same intrinsic value as the Class A-2 Units held by the equity holder prior to such conversion. Additionally, in connection with the dissolution, all PIUs were converted into shares or restricted shares of the Company's common stock. Vested PIUs were converted into shares of common stock and unvested PIUs were converted into unvested restricted shares of our common stock, which are subject to vesting terms substantially similar to those applicable to the unvested PIUs immediately prior to the conversion. As a result of the Liquidity Event, the majority of the outstanding non-vested shares vested. Any unvested awards vest ratably over five years from the date of grant of the original PIU.

2013 Omnibus Incentive Plan

In connection with the IPO, the Company adopted an equity incentive plan (the “2013 Omnibus Incentive Plan”) providing for the issuance of up to 11,300,000 of the Company's common stock under (1) equity awards granted as a result of the conversion of unvested PIUs into restricted common stock of the Company, (2) stock options and other equity awards granted in connection with the completion of the IPO, and (3) awards granted by the Company under the 2013 Omnibus Incentive Plan following the completion of the IPO. Awards granted subsequent to the IPO include equity options, non-vested shares, restricted stock units ("RSU's"), the majority of which vest in full three years from the date of grant. The Company also granted non-vested performance shares ("PS's) and performance share units ("PSU's"), both of which vest based on achievement of total shareholder return performance goals over a three-year performance period. No awards were issued under this plan in the three months ended March 29, 2015.

Other Comprehensive Earnings

The following table presents amounts reclassified out of Accumulated Other Comprehensive Loss ("AOCL") and into Net earnings for the three months ended March 29, 2015 and March 30, 2014.

Gain/(Loss)
 
Amounts Reclassified from AOCL
 
 
 
 
Three months ended
 
 
Details about Accumulated Other Comprehensive Earnings Components
 
March 29, 2015
 
March 30, 2014
 
Reclassified from AOCL to:
Gains and losses on financial instrument contracts
 
 
 
 
 
 
Interest rate contracts
 
$
(393
)
 
$
(41
)
 
Interest expense
Foreign exchange contracts
 
703

 
413

 
Cost of products sold
Total pre-tax
 
310

 
372

 
 
Tax expense
 
(227
)
 
(207
)
 
Provision for income taxes
Net of tax
 
83

 
165

 
 
 
 
 
 
 
 
 
Pension actuarial assumption adjustments
 
 
 
 
 
 
Amortization of actuarial loss
 
(275
)
 
(143
)
(a)
Cost of products sold
Tax benefit
 
105

 
55

 
Provision for income taxes
Net of tax
 
(170
)
 
(88
)
 
 
Net reclassifications into net earnings
 
$
(87
)
 
$
77

 
 


(a) This is included in the computation of net periodic pension cost (see Note 10 for additional details).
Earnings Per Share

Basic earnings per common share is computed by dividing net earnings or loss for common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are calculated by dividing net earnings by weighted-average common shares outstanding during the period plus dilutive potential common shares, which are determined as follows:
 
Three months ended
 
March 29, 2015
 
March 30, 2014
Weighted-average common shares
115,906,031

 
115,592,299

Effect of dilutive securities:
1,130,375


1,094,602

Dilutive potential common shares
117,036,406

 
116,686,901



Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value. The amount of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities. For the three months ended March 29, 2015 and March 30, 2014, conversion of stock options, non-vested shares, RSU's and PSU's totaling 10,258 and 216,648, respectively, into common share equivalents were excluded from this calculation as their effect would have been anti-dilutive.