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,
	2015				2014
	Basic		Diluted		Basic			Diluted
Numerator for Basic and Diluted Earnings per Share:
Net income	$	113,187	$	113,187	$	116,164		$	116,164
Net income (loss) attributable to noncontrolling interest		289		289		(71	)		(71	)

Net income attributable to Harman International Industries, Incorporated	$	112,898	$	112,898	$	116,235		$	116,235

Denominator for Basic and Diluted Earnings per Share:
Weighted average shares outstanding		72,079		72,079		69,432			69,432
Employee stock options		0		751		0			826

Total weighted average shares outstanding		72,079		72,830		69,432			70,258

Earnings per Share:
Earnings per share	$	1.57	$	1.55	$	1.67		$	1.65


	Six Months Ended December 31,
	2015				2014
	Basic		Diluted		Basic			Diluted
Numerator for Basic and Diluted Earnings per Share:
Net income	$	200,703	$	200,703	$	199,098		$	199,098
Net income (loss) attributable to noncontrolling interest		707		707		(110	)		(110	)

Net income attributable to Harman International Industries, Incorporated	$	199,996	$	199,996	$	199,208		$	199,208

Denominator for Basic and Diluted Earnings per Share:
Weighted average shares outstanding		72,060		72,060		69,367			69,367
Employee stock options		0		489		0			835

Total weighted average shares outstanding		72,060		72,549		69,367			70,202

Earnings per Share:
Earnings per share	$	2.78	$	2.76	$	2.87		$	2.84

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 191,519 and 254,192 shares of our common stock for the three months ended December 31, 2015 and 2014, respectively, were outstanding and were excluded from the computation of diluted earnings per share because they would have been antidilutive. In addition, no restricted stock units were outstanding for the three months ended December 31, 2015 and 2014 that were excluded from the computation of diluted earnings per share as none were deemed antidilutive. Options to purchase 191,519 and 254,192 shares of our common stock for the six months ended December 31, 2015 and 2014, respectively, were outstanding and were excluded from the computation of diluted earnings per share because they would have been antidilutive. In addition 263,392 and 144,686 restricted stock units for the six months ended December 31, 2015 and 2014, respectively, were outstanding and were excluded from the computation of diluted earnings per share as they also would have been antidilutive.