A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.


	Third Quarter Ended						Year-to-Date Ended
	September 28, 2012			September 30, 2011			September 28, 2012			September 30, 2011
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	194		$	238		$	605		$	691
Net income from continuing operations attributable to noncontrolling interests		(2	)		(2	)		(3	)		(6	)
Net income (loss) from discontinued operations attributable to noncontrolling interests		—			(1	)		(4	)		(3	)
Net income allocable to participating securities		—			—			—			(2	)

Net income allocable to L-3 Holdings’ common shareholders	$	192		$	235		$	598		$	680

Earnings (loss) allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	193		$	212		$	570		$	602
Discontinued operations, net of income tax		(1	)		23			28			78

Net income allocable to L-3 Holdings’ common shareholders	$	192		$	235		$	598		$	680

Earnings (loss) per share allocable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		96.1			103.5			97.4			106.0

Basic earnings (loss) per share allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	2.01		$	2.05		$	5.85		$	5.68
Discontinued operations, net of income tax		(0.01	)		0.22			0.29			0.74

Basic earnings per share	$	2.00		$	2.27		$	6.14		$	6.42

Diluted:
Common and potential common shares:
Weighted average common shares outstanding		96.1			103.5			97.4			106.0
Assumed exercise of stock options		2.1			1.5			1.7			2.3
Unvested restricted stock awards		2.0			2.1			2.1			1.8
Employee stock purchase plan contributions		0.3			0.4			0.3			0.1
Performance unit awards		—			—			—			0.1
Assumed purchase of common shares for treasury		(3.1	)		(2.7	)		(2.8	)		(3.1	)
Assumed conversion of the CODES⁽¹⁾		—			—			—			—

Common and potential common shares		97.4			104.8			98.7			107.2

Diluted earnings (loss) per share allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	1.98		$	2.02		$	5.78		$	5.62
Discontinued operations, net of income tax		(0.01	)		0.22			0.28			0.72

Diluted earnings per share	$	1.97		$	2.24		$	6.06		$	6.34

⁽¹⁾

L-3 Holdings’ CODES had no impact on diluted EPS for the quarterly or year-to-date periods ended September 28, 2012 or September 30, 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 September 28, 2012, the conversion price was $92.17.