EARNINGS PER SHARE

6 Months Ended

Jun. 28, 2014

EARNINGS PER SHARE

NOTE 8. EARNINGS PER SHARE

The following table represents the calculation of net earnings (loss) per common share (“EPS”):

	Second Quarter						First Half
(In millions, except per share amounts)	2014			2013			2014			2013
Basic Earnings Per Share
Numerator:
Net loss available to common shareholders	$	(190	)	$	(64	)	$	(300	)	$	(81	)
Denominator:
Weighted-average shares outstanding		535			281			532			281
Basic loss per share	$	(0.36	)	$	(0.23	)	$	(0.56	)	$	(0.29	)
Diluted Earnings Per Share
Numerator:
Net loss attributable to Office Depot, Inc.	$	(190	)	$	(54	)	$	(300	)	$	(61	)
Denominator:
Weighted-average shares outstanding		535			281			532			281
Effect of dilutive securities:
Stock options and restricted stock		—			4			—			6
Redeemable preferred stock		—			81			—			81
Diluted weighted-average shares outstanding		535			366			532			368
Diluted loss per share	$	(0.36	)		N/A		$	(0.56	)		N/A

The weighted average share calculations for the second quarter and first half 2014 are impacted by the shares issued in connection with the Merger. Potentially dilutive stock options and restricted stock of 7 million and 8 million shares were excluded from the second quarter and first half 2014 diluted loss per share calculation, respectively, because of the net loss in the periods.

Awards of options and nonvested shares representing approximately 10 million and 11 million additional shares of common stock were outstanding for the second quarter and first half of 2014, respectively, and 9 million for both the second quarter and first half of 2013, but were not included in the computation of diluted weighted-average shares outstanding because their effect would have been antidilutive. For the periods presented, no tax benefits have been assumed in the weighted average share calculation in jurisdictions with valuation allowances.

Shares of the redeemable preferred stock were fully redeemed in 2013. In periods in which the redeemable preferred stocks were outstanding, basic EPS was computed after consideration of preferred stock dividends. The redeemable preferred stock had equal dividend participation rights with common stock that required application of the two-class method for computing earnings per share. In periods of sufficient earnings, this method assumes an allocation of undistributed earnings to both participating stock classes. The two-class method was not applicable to the second quarter and first half 2013 because it would have been antidilutive. The second quarter and first half 2013 diluted share amount is provided for informational purposes, as the loss for the period causes basic earnings per share to be the most dilutive. The preferred stockholders were not required to fund losses. Refer to Note 2 for further redemption details.