EARNINGS PER SHARE ("EPS")

3 Months Ended

Mar. 31, 2012

EARNINGS PER SHARE ("EPS")

NOTE 4. EARNINGS PER SHARE (“EPS”)

Per share data is based on the weighted average number of outstanding shares of our common stock, par value $0.10 per share, during the relevant period. Basic earnings per share are calculated using only the weighted average number of outstanding shares of common stock. Diluted earnings per share computations, as calculated under the treasury stock method, include the weighted average number of shares of additional outstanding common stock issuable for stock options, restricted stock awards, restricted stock units and warrants whether or not currently exercisable. Diluted earnings per share for all the periods presented does not include securities if their effect was anti-dilutive (in millions, except per share amounts).

	Three Months Ended March 31,
	2012			2011
Net loss from continuing operations	$	(12	)	$	(14	)
Net income from discontinued operations		—			147
Net (loss) income attributable to Covanta Holding Corporation	$	(12	)	$	133
Basic (loss) earnings per share:
Weighted average basic common shares outstanding		134			147
Continuing operations	$	(0.09	)	$	(0.09	)
Discontinued operations		—			1.00
Covanta Holding Corporation	$	(0.09	)	$	0.91
Diluted (loss) earnings per share:
Weighted average basic common shares outstanding		134			147
Dilutive effect of stock options		—			—
Dilutive effect of restricted stock		—			—
Dilutive effect of warrants		—			—
Weighted average diluted common shares outstanding		134			147
Continuing operations	$	(0.09	)	$	(0.09	)
Discontinued operations		—			1.00
Covanta Holding Corporation	$	(0.09	)	$	0.91
Securities excluded from the weighted average dilutive common shares outstanding because their inclusion would have been anti-dilutive:
Stock options		—			2
Restricted stock		1			1
Restricted stock units		—			1
Warrants		28			27

In 2009, we entered into privately negotiated warrant transactions in connection with the issuance of 3.25% Cash Convertible Senior Notes due 2014 (the “3.25% Notes”). These warrants could have a dilutive effect to the extent that the price of our common stock exceeds the applicable strike price of $22.78. As of March 31, 2012, the warrants did not have a dilutive effect on earnings per share because the average market price during the periods presented was below the strike price.