Earnings Per Share

3 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

10. Earnings Per Share

Basic earnings per share attributable to Legg Mason, Inc. shareholders ("EPS") is calculated by dividing Net Income Attributable to Legg Mason, Inc. (adjusted by earnings allocated to participating securities) by the weighted-average number of shares outstanding. Legg Mason issues to employees restricted stock that are deemed to be participating securities prior to vesting, because the unvested restricted shares entitle their holder to nonforfeitable dividend rights. In this circumstance, accounting guidance requires a “two-class method” for EPS calculations that excludes earnings (both distributed and undistributed) allocated to participating securities.

Diluted EPS is similar to basic EPS, but adjusts for the effect of potential common shares unless they are antidilutive.

During the three months ended June 30, 2015 and 2014, Legg Mason repurchased and retired 1,256 and 1,871 shares of its common stock, respectively, for $68,000 and $89,999, respectively, through open market purchases. The par value of the shares repurchased is charged to common stock, with the excess of the purchase price over par first charged against additional paid-in capital, with the remaining balance, if any, charged against retained earnings.

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

	Three Months Ended June 30,
	2015		2014
Basic weighted-average shares for EPS	108,954		114,119
Potential common shares:
Dilutive employee stock options	1,281		1,093
Diluted weighted-average shares outstanding for EPS	110,235		115,212
Net Income Attributable to Legg Mason, Inc.	$	94,548	$	72,188
Less: Earnings (distributed and undistributed) allocated to participating securities	2,327		1,873
Net income (distributed and undistributed) allocated to shareholders (excluding participating securities)	$	92,221	$	70,315
Net Income per share Attributable to Legg Mason, Inc. Shareholders
Basic	$	0.85	$	0.62
Diluted	$	0.84	$	0.61

The weighted-average shares for the three months ended June 30, 2015 and 2014, excludes 2,737 and 3,007, respectively, weighted-average unvested restricted shares deemed to be participating securities.

The diluted EPS calculations for the three months ended June 30, 2015 and 2014, exclude any potential common shares issuable under the 14,205 warrants issued in connection with the repurchase of the Convertible Notes in May 2012 because the market price of Legg Mason common stock did not exceed the exercise price, and therefore, the warrants would be antidilutive.

Options to purchase 1,482 and 1,365 shares for the three months ended June 30, 2015 and 2014, respectively, were not included in the computation of diluted EPS because the presumed proceeds from exercising such options, including the related income tax benefits, exceed the average price of the common shares for the period and therefore, the options are deemed antidilutive. Further, market- and performance-based awards are excluded from potential dilution until the designated market or performance condition is met.