What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 65 added, 33 removed, 306 unchanged (24% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

20 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Net income $ 137,843 $ 190,055 $ 471,792 $ 676,600

Other comprehensive income (loss):

Foreign currency translation gain (loss) 2,801 ( 7,125 ) 5,271 ( 7,339 )

Unrealized gains (losses) on interest rate swaps, net of the change in taxes of $( 1,166 ), $( 1,631 ), $ 104 , and $( 5,497 )

Other comprehensive (loss) income:

Foreign currency translation (loss) gain ( 5,025 ) ( 11,152 ) 245 ( 18,491 )

Unrealized gains on interest rate swaps, net of the change in taxes of $( 305 ), $( 2,925 ), $( 202 ), and $( 8,422 )

916 8,776 604 25,267

Total other comprehensive income (loss) 6,298 ( 2,232 ) 4,958 9,152

Total other comprehensive (loss) income ( 4,109 ) ( 2,376 ) 849 6,776

Comprehensive income $ 133,734 $ 187,679 $ 472,641 $ 683,376

3 unchanged sentences

(In thousands, except share data)

June 30, June 30, December 31,

September 30, September 30, December 31,

2023 2022 2022

30 unchanged sentences

38,676,960 , 39,054,302 and 39,069,419 shares issued and

outstanding at June 30, 2023, June 30, 2022 and

outstanding at September 30, 2023, September 30, 2022 and

December 31, 2022, respectively

1 unchanged sentence

Retained earnings 811,434 620,692 653,484

Accumulated other comprehensive income 10,853 1,668 5,895

Accumulated other comprehensive income (loss) 6,744 ( 708 ) 5,895

Total stockholders’ equity 1,418,226 1,190,878 1,235,194

4 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

5 unchanged sentences

Equity in earnings of unconsolidated investments, net ( 235 ) ( 226 )

Goodwill impairment 550 —

Other 1,157 12,644

15 unchanged sentences

Proceeds from term loan under credit facility — 250,000

Payments on term loan under credit facility ( 6,250 ) —

Proceeds from asset-backed financing 465,500 215,000

3 unchanged sentences

Payments on short-term borrowings and current portion of long-term debt ( 19,182 ) ( 26,960 )

Payments of deferred financing costs ( 52 ) —

Payments of deferred and contingent acquisition consideration ( 551 ) ( 1,374 )

1 unchanged sentence

Payments of cash dividends ( 124,983 ) ( 111,572 )

Purchases of treasury stock ( 50,742 ) ( 278,680 )

Net cash (used in) provided by financing activities ( 328,542 ) 64,643

Repurchases of common stock ( 187,110 ) ( 471,210 )

Net cash used in financing activities ( 656,835 ) ( 248,404 )

Effect of exchange rate changes on cash and cash equivalents 952 206

39 unchanged sentences

Balance at June 30, 2023 39,049 $ 39 $ 593,081 $ 854,559 $ 10,853 $ 1,458,532

— — — 137,843 — 137,843

Foreign currency translation

— — — — ( 5,025 ) ( 5,025 )

Interest rate swaps, net of the change in taxes of $( 305 )

— — — — 916 916

Repurchases of common stock, net of retirements

( 385 ) — — ( 138,003 ) — ( 138,003 )

Share-based compensation

— — 4,596 — — 4,596

Issuance of stock under share-based compensation plans

13 — 2,332 — — 2,332

Declaration of cash dividends

— — — ( 42,965 ) — ( 42,965 )

Balance at September 30, 2023 38,677 $ 39 $ 600,009 $ 811,434 $ 6,744 $ 1,418,226

Common Stock Additional

1 unchanged sentence

Comprehensive

Shares Amount Capital Earnings Income Total

Shares Amount Capital Earnings (Loss) Income Total

Balance at December 31, 2021 40,193 $ 40 $ 551,963 $ 526,874 $ ( 7,484 ) $ 1,071,393

27 unchanged sentences

Balance at June 30, 2022 39,588 $ 40 $ 564,641 $ 662,709 $ 1,668 $ 1,229,058

— — — 190,055 — 190,055

Foreign currency translation

— — — — ( 11,152 ) ( 11,152 )

Interest rate swaps, net of the change in taxes of $( 2,925 )

— — — — 8,776 8,776

Repurchases of common stock, net of retirements

( 549 ) ( 1 ) — ( 192,528 ) — ( 192,529 )

Share-based compensation

— — 4,120 — — 4,120

Issuance of stock under share-based compensation plans

15 — 2,094 — — 2,094

Declaration of cash dividends

— — — ( 39,544 ) — ( 39,544 )

Balance at September 30, 2022 39,054 $ 39 $ 570,855 $ 620,692 $ ( 708 ) $ 1,190,878

The accompanying Notes are an integral part of the Consolidated Financial Statements.

9 unchanged sentences

You should read the interim Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and accompanying notes in our 2022 Annual Report on Form 10-K.

The results for our three and six-month periods ended June 30, 2023, are not necessarily indicative of the expected results for our fiscal year ending December 31, 2023.

The results for our three and nine-month periods ended September 30, 2023, are not necessarily indicative of the expected results for our fiscal year ending December 31, 2023.

Newly Adopted Accounting Pronouncements

As of June 30, 2023, we adopted Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and all related amendments, which are codified into Accounting Standards Codification (ASC) 848 .

This new standard provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met.

In conjunction with our debt amendments discussed further in Note 5, we adopted Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and all related amendments, which are codified into Accounting Standards Codification (ASC) 848 as of June 30, 2023 .

This standard provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met.

These transactions include contract modifications, hedging relationships and sale or transfer of debt securities classified as held-to-maturity.

3 unchanged sentences

We record all excess tax benefits as a component of income tax benefit or expense on the Consolidated Statements of Income in the period in which stock options are exercised or restrictions on restricted stock awards lapse.

We recorded excess tax benefits of $ 0.6 million in the second quarter of 2023 compared to $ 1.6 million in the second quarter of 2022 and $ 5.4 million in the six months ended June 30, 2023, compared to $ 8.9 million in the six months ended June 30, 2022.

We recorded excess tax benefits of $ 0.4 million in the third quarter of 2023 compared to $ 0.6 million in the third quarter of 2022 and $ 5.9 million in the nine months ended September 30, 2023, compared to $ 9.5 million in the nine months ended September 30, 2022.

Retained Earnings

We account for the retirement of treasury shares as a reduction of Retained earnings.

As of June 30, 2023, the Retained earnings on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $ 2.2 billion and cumulative dividends of $ 1.0 billion.

Accumulated Other Comprehensive Income

The table below presents the components of our Accumulated other comprehensive income balance (in thousands):

June 30, December 31,

As of September 30, 2023, the Retained earnings on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $ 2.3 billion and cumulative dividends of $ 1.1 billion.

Accumulated Other Comprehensive Income (Loss)

The table below presents the components of our Accumulated other comprehensive income (loss) balance (in thousands):

September 30, December 31,

2023 2022 2022

2 unchanged sentences

26,107 27,363 25,503

Accumulated other comprehensive income $ 10,853 $ 1,668 $ 5,895

Accumulated other comprehensive income (loss) $ 6,744 $ ( 708 ) $ 5,895

Note 2 – Earnings Per Share

2 unchanged sentences

Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders.

Participating securities excluded from weighted average common shares outstanding were 205,000 for the three months ended June 30, 2023 and 218,000 for the three months ended June 30, 2022, and 209,000 for the six months ended June 30, 2023 and 229,000 for the six months ended June 30, 2022.

Participating securities excluded from weighted average common shares outstanding were 205,000 for the three months ended September 30, 2023 and 213,000 for the three months ended September 30, 2022, and 207,000 for the nine months ended September 30, 2023 and 223,000 for the nine months ended September 30, 2022.

The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

30 unchanged sentences

The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):

Fair Value at June 30,

Fair Value at September 30,

Input Level Classification 2023 2022

18 unchanged sentences

Interest rate swap 2 March 9, 2020 September 29, 2022 February 26, 2027 $ 150.0 0.6690 %

For the interest rate swap contracts in effect at June 30, 2023, a portion of the change in the estimated fair value between periods relates to future interest expense.

For the interest rate swap contracts in effect at September 30, 2023, a portion of the change in the estimated fair value between periods relates to future interest expense.

Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive income on the Consolidated Balance Sheets to Interest and other non-operating expenses, net on the Consolidated Statements of Income.

These amounts were not material in the three and six-month periods ended June 30, 2023 or June 30, 2022.

These amounts were not material in the three and nine-month periods ended September 30, 2023 or September 30, 2022.

We also have in place a forward-starting interest rate swap contract to extend the hedged period for future interest payments on a portion of our variable rate borrowings.

7 unchanged sentences

We amended the floating rate option for our interest rate swap contracts and forward-starting interest rate swap contract, effective June 30, 2023, to reflect the change in the reference rate in our debt agreements from the one-month London Interbank Offered Rate Market Index Rate (LIBOR) to the one-month Term Secured Overnight Financing Rate Index Rate (Term SOFR).

As permitted by ASC 848, a change in rate only does not qualify as a hedge modification, and we have accounted for and presented our interest rate swaps contracts and forward-starting interest rate swap contract in the same manner as prior to the amendments.

As permitted by ASC 848, a change in rate only does not qualify as a hedge modification, and we have accounted for and presented our interest rate swap contracts and forward-starting interest rate swap contract in the same manner as prior to the amendments.

Our interest rate swap contracts and forward-starting interest rate swap contract are subject to master netting arrangements.

8 unchanged sentences

The table below presents the components of our debt (in thousands):

September 30,

Variable rate debt

Short-term borrowings $ — $ 10,152

Current portion of long-term debt:

17 unchanged sentences

We also entered into the Second Amendment to Credit Agreement (the Term Facility Amendment) on June 30, 2023, among us, as Borrower, the Guarantors party thereto and Bank of America, N.A.

The Term Facility Amendment updated the index used for the Base Rate (as further defined within the Term Facility Amendment) from LIBOR to SOFR.

The Term Facility Amendment updated the index used for the Base Rate (as further defined within the Term Facility Amendment) from LIBOR to Term SOFR.

Our accounts receivable securitization facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly-owned subsidiary (the Securitization Subsidiary).

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements