Note 7 – Earnings Per Share

We apply the two-class method when computing earnings per share, which requires that net income per share for each class of shares entitled to dividends be calculated assuming all of our net income is distributed as dividends to these shareholders based on their contractual rights.

The following table presents the calculation of basic and diluted earnings per share of common stock outstanding:


	Three Months Ended December 31,
	2014						2013
	Basic			Diluted			Basic		Diluted
Numerator for Basic and Diluted Earnings per Share:
Net income	$	116,164		$	116,164		$	71,629	$	71,629
Net loss attributable to noncontrolling interest		(71	)		(71	)		0		0

Net income attributable to Harman International Industries, Incorporated	$	116,235		$	116,235		$	71,629	$	71,629

Denominator for Basic and Diluted Earnings per Share:
Weighted average shares outstanding		69,432			69,432			68,715		68,715
Employee stock options		0			826			0		863

Total weighted average shares outstanding		69,432			70,258			68,715		69,578

Earnings per Share:
Earnings per share	$	1.67		$	1.65		$	1.04	$	1.03


	Six Months Ended December 31,
	2014						2013
	Basic			Diluted			Basic		Diluted
Numerator for Basic and Diluted Earnings per Share:
Net income	$	199,098		$	199,098		$	118,081	$	118,081
Net loss attributable to noncontrolling interest		(110	)		(110	)		0		0

Net income attributable to Harman International Industries, Incorporated	$	199,208		$	199,208		$	118,081	$	118,081

Denominator for Basic and Diluted Earnings per Share:
Weighted average shares outstanding		69,367			69,367			69,131		69,131
Employee stock options		0			835			0		816

Total weighted average shares outstanding		69,367			70,202			69,131		69,947

Earnings per Share:
Earnings per share	$	2.87		$	2.84		$	1.71	$	1.69

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities, as defined under GAAP, and are included in the computation of earnings per share pursuant to the two-class method.

Certain options were outstanding and not included in the computation of diluted net earnings per share because the assumed exercise of these options would have been antidilutive. Options to purchase 254,192 and 943,458 shares of our common stock for the three months ended December 31, 2014 and 2013, respectively, were outstanding and were excluded from the computation of diluted earnings per share because they would have been antidilutive. No restricted stock units were outstanding for the three months ended December 31, 2014 and 2013, that were excluded from the computation of diluted earnings per share as none were deemed antidilutive. Options to purchase 254,192 and 1,014,125 shares of our common stock for the six months ended December 31, 2014 and 2013, respectively, were outstanding and were excluded from the computation of diluted earnings per share because they would have been antidilutive. In addition 144,686 and 177,489 restricted stock units for the six months ended December 31, 2014 and 2013, respectively, were outstanding and excluded from the computation of diluted earnings per share as they also would have been antidilutive.