Sally Beauty Supply 2013 Annual Report Download - page 60

Share Repurchase Programs
In August 2012, we announced that our Board of Directors approved a share repurchase program
authorizing us to repurchase up to $300.0 million of our common stock (the ‘‘2012 Share Repurchase
Program’’). In addition, on March 5, 2013, we announced that our Board of Directors approved a new
share repurchase program authorizing us to repurchase up to $700.0 million of our common stock over the
eight quarters commencing on such date (the ‘‘2013 Share Repurchase Program’’). In connection with the
authorization of the 2013 Share Repurchase Program, the 2012 Share Repurchase Program was
terminated.
Prior to such termination, the Company had repurchased approximately 10.4 million shares at a cost of
$266.4 million under the 2012 Share Repurchase Program. In addition, during the period from March 5,
2013 through September 30, 2013, the Company repurchased approximately 8.5 million shares at a cost of
$243.3 million under the 2013 Share Repurchase Program.
During the fiscal year ended September 30, 2013, we repurchased and retired approximately 18.9 million
shares of our common stock (under the 2012 Share Repurchase Program and the 2013 Share Repurchase
Program) at a cost of $509.7 million. We reduced common stock and additional paid-in capital, in the
aggregate, by these amounts. We funded these share repurchases with the cash proceeds from our
September 2012 debt issuance, cash from operations and borrowings under the ABL facility. Please see
‘‘Item 5. Unregistered Sales of Equity Securities and Use of Proceeds—(c) Purchases of Equity Securities
by the Issuer and Affiliated Purchasers’’ in Part II, Other Information, for additional information about the
Company’s share repurchase programs.
During the fiscal year ended September 30, 2012, we repurchased and retired approximately 7.6 million
shares of our common stock from two venture capital investment funds associated with Clayton,
Dubilier & Rice, LLC (the ‘‘CD&R Investors’’) at a cost of $200.0 million.
Other Significant Items
Derivative Instruments
As a multinational corporation, we are subject to certain market risks including changes in market interest
rates and foreign currency fluctuations. We may consider a variety of practices in the ordinary course of
business to manage these market risks, including, when deemed appropriate, the use of derivative
instruments such as interest rate swaps and foreign currency options, collars and forwards (hereafter,
‘‘foreign exchange contracts’’). Currently, we do not purchase or hold any derivative instruments for
speculative or trading purposes.
Foreign Currency Derivative Instruments
We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments in
subsidiaries (including intercompany notes not permanently invested) and earnings denominated in
foreign currencies, as well as exposure resulting from the sale of products and services among the parent
company and subsidiaries with a functional currency different from the parent. Our primary exposures are
to changes in exchange rates for the U.S. dollar versus the Euro, the British pound sterling, the Canadian
dollar, the Chilean peso, and the Mexican peso. In addition, from time to time we may have exposure to
changes in the exchange rates for the British pound sterling versus the Euro in connection with the sale of
products and services among certain European subsidiaries of the Company. Our various foreign currency
exposures at times offset each other, sometimes providing a natural hedge against foreign currency risk. In
connection with the remaining foreign currency risk, the Company from time to time uses foreign exchange
contracts to effectively fix the foreign currency exchange rate applicable to specific anticipated foreign
currency-denominated cash flows, thus limiting the potential fluctuations in such cash flows resulting from
foreign currency market movements.
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