Note 2 – Earnings Per Share

Basic earnings per share is computed by dividing earnings available to MasTec’s common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing earnings by the number of fully diluted shares, which includes the effect of dilutive potential issuances of common shares as determined using earnings from continuing operations. The potential issuance of common shares upon the exercise, conversion or vesting of outstanding stock options and unvested restricted share awards, as calculated under the treasury stock method, as well as shares associated with the Company’s outstanding convertible debt securities, may be dilutive.

The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Net income attributable to MasTec:
Net income, continuing operations - basic ^(a)	$	45,591		$	49,960		$	93,936		$	104,702
Interest expense, net of tax, 2009 Convertible Notes	20			79			166			236
Net income, continuing operations - diluted	$	45,611		$	50,039		$	94,102		$	104,938
Net loss from discontinued operations - basic and diluted ^(a)	(320		)	(3,822		)	(592		)	(5,253		)
Net income attributable to MasTec - diluted	$	45,291		$	46,217		$	93,510		$	99,685
Weighted average shares outstanding:
Weighted average shares outstanding - basic	81,811			77,093			79,158			76,816
Dilutive common stock equivalents	814			775			798			774
Dilutive premium shares, 2011 Convertible Notes	3,005			6,790			5,900			6,337
Dilutive shares, 2009 Convertible Notes	194			806			560			806
Weighted average shares outstanding - diluted	85,824			85,464			86,416			84,733


(a)	Calculated as total net income (loss) less amounts attributable to non-controlling interests.

Outstanding Convertibles Notes - Diluted Share Impact

As of September 30, 2014, the Company had $100 million aggregate principal amount of 4.25% senior convertible notes outstanding (the "4.25% Convertible Notes"), composed of $97.0 million of 4.25% Convertible Notes issued in 2011 (the “2011 4.25% Notes”) and approximately $3.0 million of 4.25% Convertible Notes issued in 2009 (the “2009 4.25% Notes”). In June 2014, $115 million aggregate principal amount of 4.0% senior convertible notes (the "4.0% Convertible Notes") matured, at which time the holders elected to convert the notes and the Company paid $105.3 million in cash and issued 4.2 million shares of common stock in respect of such notes. The 4.0% Convertible Notes were composed of $105.3 million of 4.0% Convertible Notes issued in 2011 (the "2011 4.0% Notes") and approximately $9.6 million of 4.0% Convertible Notes issued in 2009 (the "2009 4.0% Notes"). The 2009 4.0% Notes and the 2009 4.25% Notes are collectively referred to as the "2009 Convertible Notes," and the 2011 4.0% Notes and the 2011 4.25% Notes are collectively referred to as the "2011 Convertible Notes." See Note 9 - Debt for additional information.

Dilutive shares associated with the 2009 Convertible Notes are attributable to the underlying principal amounts. The number of common shares issuable upon conversion of the Company’s 2009 Convertible Notes is reflected in the calculation of weighted average diluted earnings per share for the corresponding periods by application of the “if-converted” method to the extent its effect on the computation of earnings per share from continuing operations is dilutive. Under the “if-converted” method, net income from continuing operations is adjusted to add back the after-tax amount of interest recognized for the period associated with the 2009 Convertible Notes, and correspondingly, the 2009 Convertible Notes are assumed to have been converted, with the resulting common shares added to the number of weighted average shares outstanding. The 2011 Convertible Notes have an optional cash settlement feature under which, in June 2014, the Company settled the principal amount of the 2011 4.0% Notes in cash, and the Company intends to settle the principal amount of the 2011 4.25% Notes in cash in December 2014. Given the Company's intention, dilutive shares associated with the 2011 Convertible Notes are derived from the premium value of the notes in excess of their principal amount, calculated using the treasury stock method. The Company refers to these shares as the "premium shares."

The 2011 4.0% Notes, which were settled in June 2014, were convertible at $15.76 per share, and the 2011 4.25% Notes, which mature in December 2014, are convertible at $15.48 per share. The calculations underlying the number of premium shares included in the Company’s diluted share count for the periods indicated are as follows (in thousands, except per share amounts):



	As of and for the Three Months Ended September 30,							As of and for the Nine Months Ended September 30,
	2014			2013				2014			2013
Premium Share Information:		2011 4.25% Notes		2011 4.0% Notes		2011 4.25% Notes			2011 4.25% Notes		2011 4.0% Notes		2011 4.25% Notes
Number of conversion shares, principal amount		6,268		6,683		6,268			6,268		6,683		6,268
Per share price, actual average		$	29.73	$	32.84	$	32.84		$	35.06	$	30.59	$	30.59
Premium value		$	89,341	$	114,176	$	108,864		$	122,748	$	99,104	$	94,728
Premium shares		3,005		3,476		3,314			3,501		3,240		3,097

In addition to the premium shares described above, there were 2.4 million equivalent premium shares included in the Company's dilutive share calculation for the nine month period ended September 30, 2014 related to the 2011 4.0% Notes, as calculated based on the average price per share of the Company's common stock from the beginning of the period through June 15, 2014, the date of maturity.

Diluted Shares, Other Information

A total of 304,486 and 223,422 weighted average anti-dilutive common stock equivalents were not included in the Company's diluted earnings per share calculations for the three and nine month periods ended September 30, 2014, respectively. For the three and nine month periods ended September 30, 2013, there were no anti-dilutive common stock equivalents.