Earnings Per Share

12 Months Ended

Mar. 31, 2012

Earnings Per Share Disclosure [Abstract]

Earnings Per Share

13. EARNINGS PER SHARE

Basic EPS is calculated by dividing Net income attributable to Legg Mason, Inc. by the weighted-average number of shares outstanding. The calculation of weighted-average shares includes common shares, shares exchangeable into common stock and unvested restricted shares deemed to be participating securities. Diluted EPS is similar to basic EPS, but adjusts for the effect of potentially issuable common shares, except when inclusion is antidilutive.

During fiscal 2012, Legg Mason purchased and retired 13,597 shares of its common stock for $400,266, through open market purchases. During fiscal 2011, Legg Mason purchased and retired 14,552 shares of its common stock for $445,465, through ASR agreements and open market purchases. These repurchases reduced weighted-average shares outstanding by 9,716 and 9,088 shares for the years ended March 31, 2012 and 2011, respectively.

In June 2011, Legg Mason issued 1,830 shares of common stock upon the exercise of purchase contracts on the remaining Equity Units. Of these shares, 1,380 shares are included in weighted-average shares outstanding for the year ended March 31, 2012.

In August 2009, Legg Mason issued 18,596 shares of common stock through the Equity Units tender offer. Of these shares, 11,565 shares are included in the weighted-average shares outstanding for the year ended March 31, 2010.

The following table presents the computations of basic and diluted EPS:

	Years ended March 31
	2012		2011			2010
Weighted-average basic shares outstanding	143,292		155,321			153,715
Potential common shares:
Employee stock options	57		163			56
Shares related to deferred compensation	—		—			455
Shares issuable upon payment of contingent consideration	—		—			1,136
Weighted-average diluted shares	143,349		155,484			155,362
Net income	$	231,031	$	245,763		$	210,980
Less: Net income (loss) attributable to noncontrolling interests	10,214		(8,160		)	6,623
Net income attributable to Legg Mason, Inc.	$	220,817	$	253,923		$	204,357
Net income per Share attributable to Legg Mason, Inc. common shareholders
Basic	$	1.54	$	1.63		$	1.33
Diluted	$	1.54	$	1.63		$	1.32

The diluted EPS calculations for the years ended March 31, 2012, 2011 and 2010, exclude any potential common shares issuable under the convertible 2.5% senior notes, and for the years ended March 31, 2011 and 2010, exclude any potential common shares issuable under the convertible Equity Units, because the market price of Legg Mason common stock had not exceeded the price at which conversion under either instrument would be dilutive using the treasury stock method.

Options to purchase 5,239, 5,204, and 5,130 shares for the fiscal years ended March 31, 2012, 2011 and 2010, respectively, were not included in the computation of diluted earnings per share because the presumed proceeds from exercising such options, including related income tax benefits, exceed the average price of the common shares for the fiscal year and therefore the options are deemed antidilutive. Also at March 31, 2012, 2011 and 2010, warrants issued in connection with the convertible note hedge transactions described in Note 7 are excluded from the calculation of diluted earnings per share because the effect would be antidilutive.