Earnings (Loss) Per Common Share

The Company applied the two-class method of computing basic and diluted earnings (loss) per share for the three and six fiscal months ended June 29, 2012 and July 1, 2011. Historically and for the three and six fiscal months ended June 29, 2012 and July 1, 2011, the Company did not declare, pay or otherwise accrue a dividend payable to the holders of the Company’s common stock or holders of unvested share-based payment awards (restricted stock). A reconciliation of the numerator and denominator of earnings (loss) per common share – basic to earnings (loss) per common share – assuming dilution is as follows (in millions, except per share data):



	Three Fiscal Months Ended				Six Fiscal Months Ended
(in millions, except per share data)	June 29, 2012		July 1, 2011		June 29, 2012		July 1, 2011
Earnings per common share – basic:
Net income for basic EPS computation ⁽¹⁾	$	21.8	$	37.5	$	46.7	$	75.7
Weighted average shares outstanding for basic EPS computation ⁽²⁾	49.8		52.2		49.8		52.2
Earnings per common share – basic ⁽³⁾	$	0.44	$	0.72	$	0.94	$	1.45
Earnings per common share – assuming dilution:
Net income attributable to Company common shareholders	$	21.8	$	37.5	$	46.7	$	75.7
Add: preferred stock dividends, if applicable	0.1		0.1		0.2		0.2
Net income for diluted EPS computation ⁽¹⁾	$	21.9	$	37.6	$	46.9	$	75.9
Weighted average shares outstanding including nonvested shares	49.8		52.2		49.8		52.2
Dilutive effect of convertible notes	—		1.4		—		1.2
Dilutive effect of stock options and restricted stock units	0.9		0.9		0.9		0.9
Dilutive effect of assumed conversion of preferred stock	0.4		0.4		0.4		0.4
Weighted average shares outstanding for diluted EPS computation ⁽²⁾	51.1		54.9		51.1		54.7
Earnings per common share – assuming dilution	$	0.43	$	0.68	$	0.92	$	1.39


(1)	Numerator


(2)	Denominator


(3)	Under the two-class method, earnings per share – basic reflects undistributed earnings per share for both common stock and unvested share-based payment awards (restricted stock).

Under ASC 260 - Earnings per Share and ASC 470 - Debt and because of the Company’s obligation to settle the par value of the 0.875% Convertible Notes, 1.00% Senior Convertible Notes, and the Subordinated Convertible Notes in cash, the Company is not required to include any shares underlying the 0.875% Convertible Notes, 1.00% Senior Convertible Notes and Subordinated Convertible Notes in its weighted average shares outstanding – assuming dilution until the average stock price per share for the quarter exceeds the $50.36, $83.93, and $36.75 conversion price of the 0.875% Convertible Notes, 1.00% Senior Convertible Notes and the Subordinated Convertible Notes, respectively, and only to the extent of the additional shares that the Company may be required to issue in the event that the Company’s conversion obligation exceeds the principal amount of the 0.875% Convertible Notes, the 1.00% Senior Convertible Notes and the Subordinated Convertible Notes.

Regarding the 0.875% Convertible Notes, the average stock price threshold conditions had not been met as of June 29, 2012. At any such time in the future that threshold conditions are met, only the number of shares issuable under the “treasury” method of accounting for the share dilution would be included in the Company’s earnings per share – assuming dilution calculation, which is based upon the amount by which the average stock price exceeds the conversion price. In addition, shares underlying the warrants will be included in the weighted average shares outstanding – assuming dilution when the average stock price per share for a quarter exceeds the $76.00 strike price of the warrants, and shares underlying the note hedges, will not be included in the weighted average shares outstanding – assuming dilution because the impact of the shares will always be anti-dilutive.

The following table provides examples of how changes in the Company’s stock price would require the inclusion of additional shares in the denominator of the weighted average shares outstanding – assuming dilution calculation for the 0.875% Convertible Notes. The table also reflects the impact on the number of shares that the Company would expect to issue upon concurrent settlement of the 0.875% Convertible Notes and the note hedges and warrants.



Share Price	Shares Underlying 0.875% Convertible Notes	Warrant Shares	Total Treasury Method Incremental Shares ⁽¹⁾	Shares Due to the Company under Note Hedges		Incremental Shares Issued by the Company upon Conversion ⁽²⁾
$50.36	—	—	—	—		—
$60.36	1,167,502	—	1,167,502	(1,167,502	)	—
$70.36	2,003,400	—	2,003,400	(2,003,400	)	—
$80.36	2,631,259	382,618	3,013,877	(2,631,259	)	382,618
$90.36	3,120,150	1,120,363	4,240,513	(3,120,150	)	1,120,363
$100.36	3,511,614	1,711,088	5,222,702	(3,511,614	)	1,711,088


(1)	Represents the number of incremental shares that must be included in the calculation of fully diluted shares under GAAP.


(2)	Represents the number of incremental shares to be issued by the Company upon conversion of the 0.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

Regarding the 1.00% Senior Convertible Notes, the average stock price threshold conditions had not been met as of June 29, 2012. At any such time in the future that threshold conditions are met, only the number of shares issuable under the “treasury” method of accounting for the share dilution would be included in the Company’s earnings per share – assuming dilution calculation, which is based upon the amount by which the average stock price exceeds the conversion price.



Share Price	Shares Underlying 1.00% Senior Convertible Notes	Total Treasury Method Incremental Shares ⁽¹⁾
$83.93	—	—
$93.93	13,425	13,425
$103.93	24,271	24,271
$113.93	33,213	33,213
$123.93	40,712	40,712
$133.93	47,091	47,091


(1)	Represents the number of incremental shares that must be included in the calculation of fully diluted shares under GAAP.

Regarding the Subordinated Convertible Notes, the average stock price threshold conditions had not been met as of June 29, 2012. The average stock price threshold conditions had been met for the three and six months ended July 1, 2011 and 1.4 million shares and 1.2 million shares, respectively, that were considered issuable under the "treasury" method of accounting for the share dilution have been included in the Company's earnings per share calculation based upon the amount by which the three and six months ended July 1, 2011 average stock price of $42.02 and $41.22, respectively, exceeded the conversion price. At any such time in the future that threshold conditions are met, only the number of shares issuable under the “treasury” method of accounting for the share dilution would be included in the Company’s earnings per share – assuming dilution calculation, which is based upon the amount by which the average stock price exceeds the conversion price.



Share Price	Shares Underlying Subordinated Convertible Notes	Total Treasury Method Incremental Shares ⁽¹⁾
$36.75	—	—
$38.75	603,152	603,152
$40.75	1,147,099	1,147,099
$42.75	1,640,151	1,640,151
$44.75	2,089,131	2,089,131


(1)	Represents the number of incremental shares that must be included in the calculation of fully diluted shares under GAAP.