Note 12: Stockholders' Equity and Earnings (Loss) Per Share

In November 2008, the Company's Board of Directors authorized a share repurchase program to acquire up to 3,000,000 shares of the Company's outstanding common stock. The program will remain in effect until all the authorized shares are repurchased unless modified by the Board of Directors. As of December 31, 2011, 331,976 shares remain available for purchase under this program. All common stock acquired will be held as treasury stock and will be available for general corporate purposes.

In November 2011, the Company's Board of Directors authorized a share repurchase program to acquire up to 1,300,000 shares of the Company's outstanding common stock. The program is in addition to the Company's existing stock repurchase program announced in November 2008. As of December 31, 2011, 1,300,000 shares remain available for purchase under this program. All common stock acquired will be held as treasury stock and will be available for general corporate purposes.

At December 31, 2011 and 2010, 100,000,000 shares of $0.01 par value common stock and 10,000,000 shares of $0.01 par value preferred stock were authorized. Shares of common stock outstanding at December 31, 2011 and 2010 were 50,650,971 and 52,181,335, respectively. No shares of preferred stock were issued or outstanding at December 31, 2011 or 2010. The shares of preferred stock, which may be issued without further stockholder approval (except as may be required by applicable law or stock exchange rules), may be issued in one or more series, with the number of shares of each series and the rights, preferences and limitations of each series to be determined by the Company's Board of Directors. The Company has an Amended and Restated Rights Plan (the "Rights Plan") under which each share of Gardner Denver outstanding common stock has an associated right (the "Rights") to purchase a fraction of a share of Gardner Denver Series A Junior Participating Preferred Stock. The Rights issued under the Rights Plan permit the rights holders under limited circumstances to purchase common stock of Gardner Denver or an acquiring company at a discounted price, which generally would be 50% of the respective stock's then-current fair market value. The preferred stock that may be purchased upon exercise of such Rights provides preferred stockholders, among other things, a preferential quarterly dividend (which accrues until paid), greater voting rights, and greater rights over common stockholders to dividends, distributions and, in the case of an acquisition, consideration to be paid by the acquiring company.

On November 16, 2009, the Company's Board of Directors adopted a dividend policy pursuant to which the Company intends to pay quarterly cash dividends on its common stock, and declared its first quarterly dividend of $0.05 per common share, paid on December 10, 2009, to stockholders of record as of November 23, 2009. Quarterly dividends of $0.05 per common share were paid in 2011 and 2010. The Company intends to continue paying quarterly dividends, but can make no assurance that such dividends will be paid in the future since payment is dependent upon, among other factors, the Company's future earnings, cash flows, capital requirements, debt covenants, general financial condition, and general business conditions. The cash flow generated by the Company is currently used for debt service, selective acquisitions, capital accumulation, payment of cash dividends, repurchases of its common stock and reinvestment.

Basic earnings (loss) per share are computed by dividing net income (loss) attributable to Gardner Denver by the weighted average shares outstanding during the reporting period. Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, and the assumed vesting of restricted share awards if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised, and outstanding restricted share awards were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period. In accordance with the provisions of FASB ASC 718, the Company includes the impact of the proforma deferred tax assets in determining potential windfalls and shortfalls for purposes of calculating assumed proceeds under the treasury stock method.

The following table details the calculation of basic and diluted earnings (loss) per common share for the years ended December 31, 2011, 2010 and 2009:


	2011		2010		2009
Net income (loss) attributable to Gardner Denver	$	277,563		172,962		(165,185	)
Weighted average shares of common stock outstanding:
Basic		51,669,378		52,295,833		51,890,891
Effect of stock-based compensation awards⁽¹⁾		384,360		431,979		—
Diluted		52,053,738		52,727,812		51,890,891
Earnings (loss) per share:
Basic	$	5.37		3.31		(3.18	)
Diluted	$	5.33		3.28		(3.18	)

(1)

Share equivalents totaling 272,520, consisting of outstanding stock options and nonvested restricted share awards, were excluded from the computation of diluted loss per share for the year ended December 31, 2009 because the net loss for the period caused all potentially dilutive shares to be anti-dilutive.

The following table sets forth the outstanding stock options and unvested restricted share awards that have been excluded from the computation of diluted earnings per share for the years ended December 31, 2011, 2010 and 2009 because their effect would be anti-dilutive:


	2011		2010		2009
Anti-dilutive options		122,354		168,280		775,092
Anti-dilutive restricted shares		1,099		2,031		757
Total		123,453		170,311		775,849