| Equity |
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Stock Repurchases |
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In 2007 the Board of Directors approved a stock repurchase program authorizing the purchase of
up to 45.0 million shares (the “2007 Repurchase Program”). On June 29, 2011, the Board of
Directors approved a new stock repurchase program authorizing the
purchase of up to 50.0 million shares (the “2011 Repurchase Program”), which was approximately 17% of the total shares of our
outstanding common stock at that time. Share repurchases under both the 2007 and the 2011
Repurchase Programs for the periods ended September 30 were as follows: |
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2011 |
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2010 |
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Total |
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Total |
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number of |
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Average |
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number of |
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Average |
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shares |
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price paid |
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Total cash |
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shares |
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price paid |
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Total cash |
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purchased |
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per share1 |
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utilized2 |
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purchased |
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per share |
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utilized |
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Three months
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9.0 |
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$ |
39.40 |
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$ |
354.7 |
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2.2 |
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$ |
31.14 |
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$ |
69.0 |
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Nine months
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16.7 |
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$ |
39.20 |
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$ |
655.0 |
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8.7 |
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$ |
29.37 |
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$ |
255.8 |
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| 1 |
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In June of 2011, we repurchased approximately 2.5 million shares under our
2007 Repurchase Program from the holdings of the Harold W. McGraw, Jr. Trust (the “Trust”)
and the Harold W. McGraw, Jr. Family Foundation, Inc., a Connecticut non-stock corporation
(the “Foundation”). The shares were purchased at a discount of 1.375% from the June 23,
2011 New York Stock Exchange closing price through a private transaction with the trustees
of the Trust and the Board of Directors of the Foundation. We repurchased these shares with
cash for $97.0 million. Without this discounted repurchase, the average price paid per
share for the nine months ended September 30, 2011 would have been $39.14. The transaction
was approved by the Nomination and Corporate Governance and Financial Policy Committees of
our Board of Directors and we received independent financial and legal advice for this
transaction. |
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In any period, cash used in financing activities related to common stock
repurchased may differ from the comparable change in equity, reflecting timing differences
between the recognition of share repurchase transactions and their settlement for cash. As
such, in the third quarter of 2011, 0.5 million shares were repurchased for $19.4 million,
which settled in October 2011. |
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Our purchased shares may be used for general corporate
purposes, including the issuance of shares for stock compensation plans and to offset the dilutive effect of the exercise of
employee stock options. During the three and nine months ended September 30, 2011, we
repurchased 0.7 and 8.4 million shares, respectively, under the 2007 Repurchase Program. As of
September 30, 2011, there were no remaining shares available under the 2007 Repurchase Program.
During the three and nine months ended September 30, 2011, we repurchased 8.3 million shares
under the 2011 Repurchase Program. As of September 30, 2011, 41.7 million shares remained
available under the 2011 Repurchase Program. The 2011 Repurchase Program has no expiration date
and purchases under this program may be made from time to time on the open market and in private
transactions, depending on market conditions. |
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Comprehensive Income |
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The following table is a reconciliation of net income to comprehensive income, including
comprehensive income attributable to our noncontrolling interests (“NCI”), for the periods ended
September 30: |
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Three Months |
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Nine Months |
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2011 |
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2010 |
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2011 |
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2010 |
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Net income
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$ |
373.9 |
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$ |
389.7 |
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$ |
713.8 |
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$ |
690.9 |
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Other comprehensive income, net of tax:
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Foreign currency translation adjustment
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(57.1 |
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24.1 |
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(23.3 |
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4.1 |
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Pension and other postretirement benefit plans
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4.6 |
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2.1 |
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19.1 |
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10.8 |
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Unrealized loss on investment and forward exchange contracts
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(0.1 |
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(0.1 |
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(6.2 |
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(0.3 |
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Comprehensive income
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321.3 |
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415.8 |
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703.4 |
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705.5 |
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Less: comprehensive income attributable to NCI
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(1.8 |
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(10.0 |
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(12.3 |
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(19.2 |
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Comprehensive income attributable to the Company
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$ |
319.5 |
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$ |
405.8 |
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$ |
691.1 |
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$ |
686.3 |
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