UNS ENERGY EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2013

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UNS ENERGY EARNINGS PER SHARE

UNS ENERGY EARNINGS PER SHARE

We compute basic Earnings Per Share (EPS) by dividing Net Income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could result if outstanding stock options, share-based compensation awards, or UNS Energy's Convertible Senior Notes were exercised or converted into Common Stock. We excluded anti-dilutive stock options and contingently issuable shares from the calculation of diluted EPS. The numerator in calculating diluted EPS is Net Income adjusted for the interest on Convertible Senior Notes (net of tax) that would not be paid if the notes were converted to Common Stock.

The following table illustrates the effect of dilutive securities on net income and weighted average Common Stock outstanding:

	Years Ended December 31,
	2013		2012		2011
	Thousands of Dollars
Numerator:
Net Income	$	127,478	$	90,919	$	109,975
Income from Assumed Conversion of Convertible Senior Notes (1)	—		1,100		4,390
Adjusted Net Income Available for Diluted Common Stock Outstanding	$	127,478	$	92,019	$	114,365
	Thousands of Shares
Denominator:
Weighted Average Shares of Common Stock Outstanding:
Common Shares Issued	41,446		40,212		36,780
Fully Vested Deferred Stock Units	172		150		129
Participating Securities	—		—		53
Total Weighted Average Common Stock Outstanding and Participating Securities—Basic	41,618		40,362		36,962
Effect of Dilutive Securities:
Convertible Senior Notes (1)	—		1,062		4,281
Options and Stock Issuable Under Share-Based Compensation Plans	357		331		366
Total Weighted Average Common Stock Outstanding —Diluted	41,975		41,755		41,609

⁽¹⁾ In 2012, the Convertible Senior Notes were converted to Common Stock or redeemed for cash.

We excluded the following outstanding stock options, with an exercise price above market, and contingently issuable shares from our diluted EPS computation as their effect would be anti-dilutive:

	Years Ended December 31,
	2013	2012	2011
	Thousands of Shares
Stock Options	—	50	153
Restricted Stock Units	6	—	—
Total Anti-Dilutive Shares Excluded from the Diluted EPS Computation	6	50	153