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11. L-3 Holdings’ Earnings Per Common Share
A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.
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Second Quarter Ended |
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First Half Ended |
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June 29,
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July 1,
2011 |
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June 29,
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July 1,
2011 |
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(in millions, except per share data) |
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Reconciliation of net income:
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Net income
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$ |
208 |
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$ |
246 |
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$ |
411 |
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$ |
453 |
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Net income attributable to noncontrolling interests
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(3 |
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(3 |
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(5 |
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(6 |
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Net income allocable to participating securities
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— |
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(1 |
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— |
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(2 |
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Net income allocable to L-3 Holdings’ common shareholders
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$ |
205 |
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$ |
242 |
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$ |
406 |
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$ |
445 |
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Earnings per share allocable to L-3 Holdings’ common shareholders:
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Basic:
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Weighted average common shares outstanding
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97.2 |
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106.1 |
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98.1 |
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107.3 |
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Basic earnings per share:
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Net income
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$ |
2.11 |
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$ |
2.28 |
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$ |
4.14 |
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$ |
4.15 |
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Diluted:
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Common and potential common shares:
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Weighted average common shares outstanding
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97.2 |
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106.1 |
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98.1 |
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107.3 |
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Assumed exercise of stock options
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1.6 |
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2.7 |
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1.4 |
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2.7 |
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Unvested restricted stock awards
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2.4 |
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1.9 |
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2.2 |
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1.6 |
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Employee stock purchase plan contributions
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0.3 |
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— |
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0.3 |
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— |
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Performance unit awards
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— |
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— |
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— |
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0.1 |
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Assumed purchase of common shares for treasury
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(3.0 |
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(3.5 |
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(2.6 |
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(3.3 |
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Assumed conversion of the CODES
(1)
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— |
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— |
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Common and potential common shares
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98.5 |
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107.2 |
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99.4 |
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108.4 |
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Diluted earnings per share:
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Net income
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$ |
2.08 |
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$ |
2.26 |
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$ |
4.08 |
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$ |
4.11 |
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| (1) |
L-3 Holdings’ CODES had no impact on diluted EPS for the quarterly or first half periods ended June 29, 2012 or July 1, 2011 as the
average market price of L-3 Holdings common stock during these periods was less than the price at which the CODES would have been convertible into L-3 Holdings common stock. As of June 29, 2012, the conversion price was $95.46.
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The computation of diluted EPS excluded 3.5 million and 3.6 million of stock options for the quarterly and
first half periods ended June 29, 2012, respectively, and 3.0 million and 2.9 million of stock options and restricted stock units for the quarterly and first half periods ended July 1, 2011, respectively, as they were
anti-dilutive.
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