Expanded Share Repurchase Program
As previously announced, at their June 29 meeting, the board of directors of Lubrizol authorized a 5 million share increase in the company's share repurchase program. When combined with the shares available under the existing repurchase program, this increase permits Lubrizol to repurchase approximately 7.2 million of its common shares. The total authorization represents approximately 10 percent of the company's common shares currently outstanding.
Through this program, Lubrizol expects to make purchases from time to time either in the open market or through private transactions. Although the repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time, the company expects the program will be completed within 18 to 24 months.
Year-to-date 2010, the company repurchased 1.575 million shares for $125.5 million at an average price of approximately $80 per share.
Recent Financing Activities
On July 19, the company revised and extended its U.S. revolving credit facility, which was set to expire in September 2011. The size of the new facility was increased to $500 million from $350 million and will expire in July 2015. In addition to this credit facility, the company has a 150 million euro credit facility that expires in July 2012. Currently, both the U.S. and the euro credit facilities are undrawn.
Earnings Outlook
The company increased its earnings guidance that was issued on April 29. The company's guidance for 2010 earnings is now in the range of $9.52 to $9.92 per diluted share, including restructuring charges of $.08 per diluted share, primarily related to the closing of a Canadian additives blending facility and restructuring initiatives in the Advanced Materials segment. For 2009, the company reported earnings of $7.26 per diluted share, including restructuring and impairment charges of $.29 per share. Excluding the special charges from both years, the company projects 2010 adjusted earnings in the range of $9.60 to $10.00 per diluted share, which compares with 2009 adjusted earnings of $7.55 per diluted share.