Earnings Per Share ("EPS")

12 Months Ended

Dec. 31, 2013

Earnings Per Share ("EPS") [Abstract]

Earnings Per Share ("EPS")

16.           EARNINGS PER SHARE (“EPS”)

The following table presents a reconciliation of the numerators and denominators of the basic and diluted EPS calculations for the years ended December 31:

	2013		2012		2011
Numerator:
Net earnings	$	261.8	$	107.6	$	275.2
Denominator:
Weighted average shares used to compute basic EPS		63.0		68.6		77.1
Effect of dilutive securities -
Employee stock plans		1.1		0.9		0.8
Weighted average shares used to compute diluted EPS		64.1		69.5		77.9
Basic net EPS	$	4.16	$	1.57	$	3.57
Diluted net EPS	$	4.08	$	1.55	$	3.53

Restricted stock units (“RSUs”), stock options, and dividend equivalent units totaling an additional 2.4 million, 3.8 million and 5.7 million shares of Class A Common Stock in 2013, 2012, and 2011, respectively, were outstanding but were not included in the computation of diluted net earnings per share because the effect would have been antidilutive.

Under the terms of Lexmark's RSU agreements, unvested RSU awards contain forfeitable rights to dividends and dividend equivalent units. Because the dividend equivalent units are forfeitable, they are defined as non-participating securities. As of December 31, 2013, there were approximately 0.2 million dividend equivalent units outstanding, which will vest at the time that the underlying RSU vests.

In addition to the 2.4 million antidilutive shares for the year ended December 31, 2013, mentioned above, unvested restricted stock units with a performance condition that were granted in the first quarter of 2013 and 2012 were also excluded from the computation of diluted earnings per share. According to FASB guidance on earnings per share, contingently issuable shares are excluded from the computation of diluted EPS if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. If the performance condition were to become satisfied based on actual financial results and the performance awards would have a dilutive impact on EPS, the performance awards included in the diluted EPS calculation would be in the range of 0.1 million to 0.5 million shares depending on the level of achievement. Refer to Note 6 of the Notes to Consolidated Financial Statements for additional information regarding restricted stock awards with a performance condition.

The Company executed four accelerated share repurchase agreements with financial institution counterparties in 2013, resulting in a total of 2.7 million shares repurchased at a cost of $82 million during the year. The ASRs had a favorable impact to basic and diluted EPS in 2013.

In addition to the 3.8 million antidilutive shares for the year ended December 31, 2012 mentioned above, unvested restricted stock units with a performance condition that were granted in the first quarter of 2012 were also excluded from the computation of diluted earnings per share.

The Company executed four accelerated share repurchase agreements with financial institution counterparties in 2012, resulting in a total of 8.1 million shares repurchased at a cost of $190 million during the year. The ASRs had a favorable impact to basic and diluted EPS in 2012.

In addition to the 5.7 million antidilutive shares for the year ended December 31, 2011 mentioned above, unvested restricted stock units with a performance condition that were granted in the first quarter of 2011 were also excluded from the computation of diluted earnings per share. The performance period for these awards ended on December 31, 2011. The Company's assessment as of December 31, 2011 was that the minimum level of achievement had not been met and as a result these awards were cancelled.

The Company executed two accelerated share repurchase agreements with financial institution counterparties in 2011, resulting in a total of 7.9 million shares repurchased at a cost of $250 million over the third and fourth quarter. The ASRs had a favorable impact to basic and diluted EPS in 2011.