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Stock Repurchase Program
9 Months Ended
Jun. 30, 2013
Stock Repurchase Program  
Stock Repurchase Program

3.              Stock Repurchase Program

 

In August 2011, the Company’s Board of Directors authorized a stock repurchase program (Repurchase Program), pursuant to which the Company could initially purchase up to $200 million of its common stock. As of June 30, 2013, the Company’s Board of Directors has increased the authorization to repurchase common stock by $800 million, increasing the total authorized repurchases under the Repurchase Program to $1.0 billion.

 

Share repurchases under the Repurchase Program can be made through open market purchases, unsolicited or solicited privately negotiated transactions or other methods, including pursuant to a Rule 10b5-1 plan. Under the Repurchase Program, which includes purchases made through an accelerated share repurchase (ASR) agreement, Rule 10b5-1 repurchase plans and the open market, the Company has purchased a total of 24.6 million shares at an average price of $23.35 per share, for a total cost of $573.7 million. As of June 30, 2013, $426.3 million was available for the repurchase of the Company’s common stock pursuant to the Repurchase Program. Repurchased shares are returned to treasury status, but remain authorized for registration and issuance in the future.

 

Accelerated Share Repurchase

 

In connection with the Repurchase Program, the Company entered into an ASR agreement with Bank of America, N.A. (Bank of America) on August 16, 2011. Under the ASR agreement, the Company agreed to repurchase $100 million of its common stock from Bank of America. During the quarter ended September 30, 2011, Bank of America delivered 4.3 million shares to the Company, at which point the Company’s shares outstanding were reduced and accounted for as a reduction to retained earnings. The number of shares delivered was the minimum amount of shares Bank of America was contractually obligated to provide under the ASR agreement.

 

The number of shares that ultimately were repurchased by the Company under the ASR agreement was based upon the volume-weighted average share price of the Company’s common stock during the term of the ASR agreement, less an agreed discount, subject to collar provisions which established a maximum and minimum price and other customary conditions under the ASR agreement. The ASR agreement was settled in full on March 7, 2012 and the total number of shares repurchased was 4.8 million at an average price of $20.97 per share.

 

Rule 10b5-1 Repurchase Plan and Open Market Purchases

 

In connection with the Repurchase Program, the Company enters into Rule 10b5-1 repurchase plans. The timing, nature and amount of purchases depended on a variety of factors, including market conditions and the volume limit defined by Rule 10b-18.

 

From the inception of the Repurchase Program through June 30, 2013, the Company had repurchased through open market purchases and purchases made under Rule 10b5-1 plans, a total of 19.8 million shares at an average price of $23.93 per share, for a total cost of $473.7 million, which included 0.2 million shares repurchased in transactions that were settled in the fourth quarter of fiscal 2013.