L-3 Holdings' Earnings Per Common Share

6 Months Ended

Jun. 26, 2015

13. L-3 Holdings’ Earnings Per Common Share

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


	Second Quarter Ended						First Half Ended
	June 26, 2015			June 27, 2014			June 26, 2015			June 27, 2014
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	124		$	141		$	233		$	313
Net income attributable to noncontrolling interests		(4	)		(4	)		(8	)		(6	)

Net income attributable to L-3 Holdings’ common shareholders	$	120		$	137		$	225		$	307

Earnings per share attributable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		82.1			86.1			82.2			86.1

Basic earnings per share:
Net income	$	1.46		$	1.59		$	2.74		$	3.57

Diluted:
Common and potential common shares:
Weighted average common shares outstanding		82.1			86.1			82.2			86.1
Assumed exercise of stock options		2.2			2.9			2.5			3.2
Unvested restricted stock awards		1.2			1.6			1.3			1.6
Employee stock purchase plan contributions		0.2			0.2			0.2			0.1
Performance unit awards		0.1			0.1			0.1			0.2
Assumed purchase of common shares for treasury		(2.6	)		(3.3	)		(2.8	)		(3.4	)
Assumed conversion of the CODES⁽¹⁾		—			1.7			—			1.6

Common and potential common shares		83.2			89.3			83.5			89.4

Diluted earnings per share:
Net income	$	1.44		$	1.53		$	2.69		$	3.43

⁽¹⁾

L-3 Holdings’ 3% Convertible Contingent Debt Securities (CODES) due 2035 were retired on June 20, 2014 and were dilutive for the quarterly and first half periods ended June 27, 2014 as the average market price of L-3 Holdings’ common stock during the period that the CODES were outstanding was greater than the price at which the CODES would have been convertible into L-3 Holdings’ common stock. As of June 18, 2014, the final date of conversion, the conversion price was $88.71.

The computation of diluted EPS excludes shares for stock options of 0.7 million and 0.5 million for the quarterly and first half periods ended June 26, 2015, respectively, and shares for stock options and employee stock purchase plan contributions of 0.5 million and 0.4 million for the quarterly and first half periods ended June 27, 2014, respectively, as they were anti-dilutive.