Earnings per Share (EPS)

Basic and diluted EPS are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stock awards are considered participating securities because holders are entitled to receive non-forfeitable dividends during the vesting term. Diluted EPS includes securities that could potentially dilute basic EPS during a reporting period, for which the Company includes the Debentures and share-based compensation awards.

A conversion of the Debentures may result in payment for any conversion value in excess of the principal amount of the Debentures in the Company’s common stock. For diluted EPS purposes, potential common stock is calculated based on whether the market price of the Company’s common stock at the end of each reporting period is in excess of the conversion price of the Debentures. For a full discussion of the conditions under which the Debentures may be converted, the conversion rate to common stock and the conversion price, see Note 11 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

For all but the performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method. Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation. For the Company’s other share-based compensation awards, performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted. For a full discussion of the Company’s share-based compensation awards, see Note 17 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The computation of diluted EPS excludes anti-dilutive shares of approximately 0.6 million for the three months ended March 31, 2012 and 0.1 million for the three months ended March 31, 2011. These anti-dilutive shares were due to certain share-based compensation awards calculated under the treasury stock method. This anti-dilution generally occurs where the exercise prices are higher than the average market value of the Company’s stock price during the applicable period.

The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS:



	Three Months Ended March 31,
	2012			2011
	(In millions, except per share amounts)
EPS numerator:
Income from continuing operations, net of income taxes	$	182.3		$	194.6
Less: Net income attributable to noncontrolling interests	5.6			2.2
Income from continuing operations attributable to common stockholders, before allocation of earnings to participating securities	176.7			192.4
Less: Earnings allocated to participating securities	(1.2		)	(0.9		)
Income from continuing operations attributable to common stockholders, after earnings allocated to participating securities ⁽¹⁾	175.5			191.5
Loss from discontinued operations, net of income taxes	(4.0		)	(15.9		)
Net income attributable to common stockholders, after earnings allocated to participating securities ⁽¹⁾	$	171.5		$	175.6

EPS denominator:
Weighted average shares outstanding — basic	270.1			268.9
Impact of dilutive securities	0.8			3.9
Weighted average shares outstanding — diluted	270.9			272.8

Basic EPS attributable to common stockholders:
Income from continuing operations	$	0.64		$	0.71
Loss from discontinued operations	(0.01		)	(0.05		)
Net income	$	0.63		$	0.66

Diluted EPS attributable to common stockholders:
Income from continuing operations	$	0.64		$	0.70
Loss from discontinued operations	(0.01		)	(0.05		)
Net income	$	0.63		$	0.65


⁽¹⁾	The reallocation adjustment for participating securities to arrive at the numerator used to calculate diluted EPS was less than $0.1 million for the periods presented.