Earnings Per Common Share

All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities in undistributed earnings along with common shareholders. The Company applies the two-class method of computing basic and diluted earnings per share. Historically and for the years ended December 31, 2012, 2011 and 2010, 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). There was no impact on the Company’s earnings per common share — assuming dilution computation.

A reconciliation of the numerator and denominator of earnings per common share-basic to earnings per common share-assuming dilution is as follows (in millions, except per share data):



	Year Ended
	Dec 31, 2012		Dec 31, 2011		Dec 31, 2010
Earnings per share — basic:
Net income attributable to Company common shareholders — for basic EPS computation ⁽¹⁾	$	3.7	$	65.7	$	61.4
Weighted average shares outstanding for basic EPS computation ^(2,3)	49.7		51.9		52.1
Earnings per common share — basic ⁽³⁾	$	0.07	$	1.27	$	1.18
Earnings per share — assuming dilution:
Net income attributable to Company common shareholders	$	3.7	$	65.7	$	61.4
Add: Preferred stock dividends on convertible stock	0.3		0.3		0.3
Net income attributable to Company common shareholders — for diluted EPS computation ⁽¹⁾	$	4.0	$	66.0	$	61.7
Weighted average shares outstanding including nonvested shares	49.7		51.9		52.1
Dilutive effect of convertible bonds	—		0.6		—
Dilutive effect of stock options and restricted stock units	1.0		0.8		0.6
Dilutive effect of assumed conversion of preferred stock	0.4		0.4		0.4
Weighted average shares outstanding for diluted EPS computation ⁽²⁾	51.1		53.7		53.1
Earnings per common share — assuming dilution	$	0.08	$	1.23	$	1.16


(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).

The Company was authorized by its Board of Directors on October 29, 2012 to renew its stock repurchase program that expired on October 28, 2011 up to $125 million of common stock. The stock repurchase program will be effective for one year. Stock purchases under this program may be made through open market and privately negotiated transactions at times and in such amounts as deemed appropriate by a special committee appointed by the Board. The Company purchased $1.2 million or 50,000 common shares at an average price of $24.80 per share during the year ended December 31, 2012. Under this same program, the Company purchased $62.5 million, or 2.5 million common shares at an average price of $24.72, in the fourth quarter of 2011. In 2010 the Company did not have a stock repurchase program and as a result, did not repurchase any of its common stock.

As of December 31, 2012, 2011 and 2010, there were approximately 553 thousand, 506 thousand, and 404 thousand stock options excluded from the earnings per common share — assuming dilution computation because their impact was anti-dilutive, respectively.

Certain effects on diluted net income per common share may result in future periods as a result of the Company’s (i) $355.0 million in 0.875% Convertible Notes and the Company’s entry into note hedge and warrant agreements and (ii) the $429.5 million in Subordinated Convertible Notes. Refer to Note 9 - Long-Term Debt for a description of the key terms of these transactions.

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 December 31, 2012. At any such time in the future that the 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.



	Shares Underlying 0.875% Convertible	Warrant	Total Treasury Method Incremental	Shares Due to the Company under		Incremental Shares Issued by the Company upon
Share Price	Notes	Shares	Shares ⁽¹⁾	Note Hedges		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 U.S. 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 December 31, 2011. The 1.00% Senior Convertible Notes had been repaid as of December 31, 2012. At any such time in the future the 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.



	Shares Underlying 1.00% Senior	Total Treasury Method
Share Price	Convertible Notes	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 U.S. GAAP.

Regarding the Subordinated Convertible Notes, the average stock price threshold conditions had not been met as of December 31, 2012 or December 31, 2011. At any such time in the future the 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.



	Shares Underlying Subordinated	Total Treasury Method
Share Price	Convertible Notes	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 U.S. GAAP.