Plantronics 2012 Annual Report Download - page 40

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13. COMMON STOCK REPURCHASES
From time to time, the Company's Board authorizes programs under which the Company may repurchase shares of its common
stock, depending on market conditions, in the open market or through privately negotiated transactions. Repurchased shares are
held as treasury stock until such time as they are retired or re-issued. During the years ended March 31, 2012, 2011 and 2010, the
Company repurchased 8,027,287, 3,315,000 and 1,935,100 shares of its common stock, respectively, for a total cost of $273.8
million, $105.5 million and $49.7 million, respectively. Of the total 8,027,287 shares repurchased in fiscal year 2012, 4,327,770
shares were repurchased in privately negotiated transactions and 3,699,517 shares were repurchased in the open market. All
repurchases in fiscal years 2011 and 2010 were made in the open market. Repurchases by the Company pursuant to the Board
authorized programs during fiscal years 2012, 2011 and 2010 are discussed in detail below. As of March 31, 2012, there were
633,613 remaining shares authorized for repurchase.
Privately Negotiated Transactions
In May 2011, pursuant to a Board authorized accelerated share repurchase ("ASR") program, the Company entered into two
separate Master Confirmation and Supplemental Confirmations (“May 2011 ASR Agreements”) with Goldman, Sachs & Co.
(“Goldman”) consisting of a "Collared ASR Agreement" and an "Uncollared ASR Agreement". In August 2011, the Company
entered into an additional Supplemental Confirmation with Goldman, consisting of an uncollared ASR ("August 2011 Uncollared
ASR Agreement"). Details of these transactions are described further below.
In accordance with the Equity topic of the FASB Accounting Standards Codification ("ASC"), the Company accounted for each
agreement with Goldman as two separate transactions: (i) as shares of common stock acquired in a treasury stock transaction
recorded on the acquisition date and (ii) as a forward contract indexed to the Company’s own common stock. As such, the Company
accounted for the shares that it received under the May 2011 ASR Agreements and the August 2011 Uncollared ASR Agreement
as a repurchase of its common stock for the purpose of calculating earnings per common share. The Company has determined
that the forward contracts indexed to the Company’s common stock met all of the applicable criteria for equity classification in
accordance with the Derivatives and Hedging topic of the FASB ASC and, therefore, were not accounted for as derivative
instruments.
May 2011 ASR Agreements
Under the May 2011 ASR Agreements, the Company paid Goldman $100.0 million in May 2011. As of March 31, 2012, Goldman
delivered 2,831,519 shares of the Company's common stock under the Collared ASR and Uncollared ASR Agreements.
As of March 31, 2012, the Company received a total of 1,398,925 shares from Goldman under the Collared ASR Agreement at
a total cost of $50.0 million and an average price per share of $35.74 based on the volume-weighted average price ("VWAP") of
the Company's common stock during the term of the Collared ASR Agreement, less a discount.
As of March 31, 2012, the Company received a total of 1,432,594 shares from Goldman under the Uncollared ASR Agreement
at a total cost of $50.0 million and an average price per share of $34.90 based on the VWAP of the Company's common stock
during the term of the Uncollared ASR Agreement, less a discount.
August 2011 Uncollared ASR Agreement
Under the August 2011 Uncollared ASR Agreement, the Company paid Goldman $50.0 million in August 2011. As of March 31,
2012, the Company received a total of 1,496,251 shares from Goldman at a total cost of $50.0 million and an average price per
share of $33.42 based on the VWAP of the Company's common stock during the term of the agreement, less a discount.
Open Market Repurchases
Under the Board authorized programs, during the years ended March 31, 2012, 2011 and 2010, the Company repurchased 3,699,517,
3,315,000 and 1,935,100 shares of its common stock, respectively, in the open market for a total cost of $123.8 million, $105.5
million and $49.7 million, respectively, and an average price per share of $33.46, $31.83 and $25.66, respectively. The Company
financed the repurchases using a combination of funds generated from operations and borrowings under its revolving line of credit.
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In addition, the Company withheld shares valued at $2.6 million during the year ended March 31, 2012, compared to an immaterial
amount in fiscal year 2011 and none in fiscal year 2010, in satisfaction of employee tax withholding obligations upon the vesting
of restricted stock granted under the Company's stock plans. The amounts withheld were equivalent to the employees' minimum
statutory tax withholding requirements and are reflected as a financing activity within the Company's Consolidated statements of
cash flows. These share withholdings have the effect of share repurchases by the Company as they reduce the number of shares
outstanding as a result of the vesting.
Treasury Stock Retirement
During the years ended March 31, 2012, 2011 and 2010, the Company retired 5,000,000, 4,000,000 and 2,000,000 shares of
treasury stock, respectively, at a total value of 177.1 million, 102.4 million, and 56.2 million, respectively. These were non-cash
equity transactions in which the cost of the reacquired shares was recorded as a reduction to both Retained earnings and Treasury
stock. The shares were returned to the status of authorized but unissued shares.
14. ACCUMULATED OTHER COMPREHENSIVE INCOME
The components of accumulated other comprehensive income were as follows:
March 31,
(in thousands) 2012 2011
Accumulated unrealized gain (loss) on cash flow hedges, net of an immaterial tax impact $ 1,904 $ (3,715)
Accumulated foreign currency translation adjustments 4,392 5,181
Accumulated unrealized gain on investments, net of an immaterial tax impact 61 7
Accumulated other comprehensive income $ 6,357 $ 1,473
15. EMPLOYEE BENEFIT PLANS
The Company has a defined contribution benefit plan under Section 401(k) of the Internal Revenue Code, which covers substantially
all U.S. employees. Eligible employees may contribute pre-tax amounts to the plan via payroll withholdings, subject to certain
limitations. Under the plan, the Company matches 50% of the first 6% of employees' compensation and provides a non-elective
Company contribution equal to 3% of base salary. All matching contributions are 100% vested immediately. Total Company
contributions in fiscal year 2012, 2011 and 2010 were $3.8 million, $3.7 million, and $3.7 million, respectively.
16. FOREIGN CURRENCY DERIVATIVES
The Company uses derivative instruments primarily to manage exposures to foreign currency risks. The Company’s primary
objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign
currency. The program is not designed for trading or speculative purposes. The Company’s derivatives expose the Company to
credit risk to the extent that the counterparties may be unable to meet the terms of the agreements. The Company seeks to mitigate
such risk by limiting its counterparties to major financial institutions and by spreading the risk across several major financial
institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored
on an ongoing basis.
In accordance with Derivatives and Hedging Topic of the FASB ASC, the Company recognizes derivative instruments as either
assets or liabilities on the balance sheet at fair value. Changes in fair value (i.e., gains or losses) of the derivatives are recorded
as Net revenues or Interest and other income (expense), net or as Accumulated other comprehensive income.
Refer to Note 6, Fair Value Measurements, which discloses the Company's fair value hierarchy for its derivative instruments.
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