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 on the basis of fully diluted shares and earnings, which includes the effect of potentially dilutive common shares. Potentially dilutive common shares include 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 securities.

As described in Note 9 – Debt, the Company had convertible notes outstanding during each of the three years in the period ended December 31, 2011. During the first quarter of 2011, the Company exchanged $105.3 million of its original 4.0% senior convertible notes (the "Original 4.0% Notes") and $97.0 million of its original 4.25% senior convertible notes (the "Original 4.25% Notes" and, together with the Original 4.0% Notes, the "Original Notes") for identical principal amounts of new 4.0% and 4.25% senior convertible notes (the "New 4.0% Notes" and the "New 4.25% Notes," respectively and, collectively, the "New Notes"). The terms of the New Notes are substantially identical to the Original Notes, except that the New Notes have an optional physical (share), cash or combination settlement feature and contain certain conditional conversion features. Due to the optional cash settlement feature and management's intent to settle the principal amount thereof in cash, the conversion shares underlying the outstanding principal amount of the New Notes, totaling approximately 13.0 million shares, are not required to be included in the Company's diluted share count. If, however, the Company's average stock price per share for the corresponding period exceeds the $15.76 conversion price for the New 4.0% Notes or the $15.48 conversion price for the New 4.25% Notes, the resulting amount, in shares, of the premium over the principal amount is included in the Company's diluted share count ("premium shares").

The number of common shares issuable upon conversion of the Company's Original Notes is reflected in the calculation of diluted earnings per share for the corresponding periods by application of the "if-converted" method to the extent their effect is dilutive. Under the "if-converted" method, net income is adjusted to add back the after-tax amount of interest recognized in the period associated with the convertible notes, and correspondingly, the convertible notes are assumed to have been converted with the resulting common shares added to weighted average shares outstanding. Premium shares associated with the New Notes are reflected in the calculation of diluted earnings per share to the extent that the Company's average stock price for the corresponding periods exceeds the respective conversion prices of the New Notes, beginning with the date of issuance, or the beginning of the period, as applicable.

The following table summarizes the principal amounts of the Company's outstanding convertible notes for the periods indicated, including their respective classification within the computation of earnings per share for each period (in millions):


	Year Ended December 31,
	2011		2010		2009
Dilutive:
New 4.0% Notes (1)	$	105.3		N/A		N/A
New 4.25% Notes (1)		97.0		N/A		N/A
Original 4.0% Notes (2)		9.7	$	115.0	$	115.0
Original 4.25% Notes (2)		3.0		100.0		100.0

Total principal amount, dilutive outstanding convertible notes	$	215.0	$	215.0	$	215.0

Anti-dilutive:
8.0% convertible notes		N/A		N/A	$	55.0

(1)	Diluted shares associated with the New Notes are attributable to the premium over the respective conversion prices.

(2)	Diluted shares associated with the Original Notes are attributable to the underlying principal amounts.

The Company's average stock price for the year ended December 31, 2011 exceeded the conversion prices of the New Notes. The number of premium shares included in the Company's diluted share count varies with fluctuations in the Company's actual share price for the related periods. Higher actual share prices result in a greater number of equivalent premium shares. Details of the calculation underlying the number of premium shares included in the Company's diluted share count for the period indicated are as follows (in thousands, except per share amounts):


	Year Ended December 31, 2011
	New 4.0% Senior Convertible Notes		New 4.25% Senior Convertible Notes
Principal amount	$	105,322	$	97,000
Conversion price per share	$	15.76	$	15.48

Number of conversion shares, principal amount		6,683		6,268

Weighted average actual per share price	$	18.90	$	18.88

Excess over principal amount	$	20,968	$	21,319

Weighted average equivalent premium shares		1,067		1,095

The following table provides details of the Company's earnings per share calculations for the periods indicated (in thousands, except per share amounts):


	Year Ended December 31,
	2011		2010		2009
Basic
Net income attributable to MasTec	$	106,001	$	90,528	$	70,748
Weighted average shares outstanding		82,182		76,132		75,701

Basic earnings per share attributable to MasTec	$	1.29	$	1.19	$	0.93

Diluted
Net income:
Basic net income attributable to MasTec	$	106,001	$	90,528	$	70,748
Interest expense on Original 4.0% Notes, net of tax		331		2,700		2,260
Interest expense on Original 4.25% Notes, net of tax		154		2,494		419

Diluted net income attributable to MasTec	$	106,486	$	95,722	$	73,427

Shares:
Basic weighted average shares outstanding		82,182		76,132		75,701
Dilutive common stock equivalents		1,129		1,022		1,025
Dilutive premium shares, New 4.0% Notes		1,067		—		—
Dilutive premium shares, New 4.25% Notes		1,095		—		—
Dilutive shares, Original 4.0% Notes		862		7,297		4,134
Dilutive shares, Original 4.25% Notes		383		6,462		903

Diluted weighted average shares outstanding		86,718		90,913		81,763

Diluted earnings per share attributable to MasTec	$	1.23	$	1.05	$	0.90

For the year ended December 31, 2011, the weighted average number of anti-dilutive common stock equivalents that were not included in the Company's diluted earnings per share calculations was 9,479. For the years ended December 31, 2010 and 2009, there were 1,031,894 and 2,022,890 of weighted average anti-dilutive common stock equivalents, respectively, that were not included in the Company's diluted earnings per share calculations.

During the fourth quarter of 2011, the Company's Board of Directors authorized a share repurchase plan, under which the Company repurchased 4.6 million shares of treasury stock for $75.0 million. See Note 13 – Common Stock Activity.