A reconciliation of basic and diluted EPS is presented in the table below.


	Year Ended December 31,
	2012			2011			2010
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	820		$	968		$	966
Net income from continuing operations attributable to noncontrolling interests		(6	)		(9	)		(9	)
Net income from discontinued operations attributable to noncontrolling interests		(4	)		(3	)		(2	)
Net income allocable to participating securities		—			(2	)		(5	)

Net income allocable to L-3 Holdings common shareholders	$	810		$	954		$	950

Earnings allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	782		$	853		$	810
Discontinued operations, net of income tax		28			101			140

Net income allocable to L-3 Holdings common shareholders	$	810		$	954		$	950

Earnings per share allocable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		96.3			104.4			114.3

Basic earnings per share allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	8.12		$	8.17		$	7.09
Discontinued operations, net of income tax		0.29			0.97			1.22

Basic earnings per share	$	8.41		$	9.14		$	8.31

Diluted:
Common and potential common shares:
Weighted average common shares outstanding		96.3			104.4			114.3
Assumed exercise of stock options		1.9			2.0			2.7
Unvested restricted stock awards		2.0			1.8			1.3
Employee stock purchase plan contributions		0.3			0.2			0.5
Performance unit awards		0.1			0.1			0.1
Assumed purchase of common shares for treasury		(3.0	)		(2.9	)		(3.8	)
Assumed conversion of the CODES⁽¹⁾		—			—			—

Common and potential common shares		97.6			105.6			115.1

Diluted earnings per share allocable to L-3 Holdings’ common shareholders:
Continuing operations	$	8.01		$	8.08		$	7.04
Discontinued operations, net of income tax		0.29			0.95			1.21

Diluted earnings per share	$	8.30		$	9.03		$	8.25

⁽¹⁾

L-3 Holdings’ CODES had no impact on diluted EPS for the years ended December 31, 2012, 2011 and 2010 because 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 December 31, 2012, 2011 and 2010, the conversion prices were $91.21, $96.48 and $98.94, respectively.