EARNINGS PER SHARE (EPS)

9 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)

NOTE 11—EARNINGS PER SHARE (EPS)

        For the three and nine months ended September 30, 2012 and October 2, 2011, basic earnings per common share ("EPS") was calculated utilizing the "two-class" method. For the three and nine months ended October 2, 2011, diluted EPS was calculated utilizing the two-class method, while diluted EPS for the three and nine months ended September 30, 2012 was calculated utilizing the "if-converted" method. In prior periods, the Company's outstanding participating redeemable convertible preferred stock was more dilutive under the two-class method; however, given the conversion of such preferred stock into common stock during the fourth quarter of 2011, together with the issuance of the Series C junior participating convertible preferred stock at the same date, the impact of the outstanding participating securities during the three and nine months ended September 30, 2012 was not more dilutive when computing diluted EPS using the two-class method. As such, the if-converted method was used to compute diluted EPS during the three and nine months ended September 30, 2012.

        Under the two-class method, EPS is computed by dividing earnings allocated to common stockholders by the weighted-average number of common shares outstanding for the period. Earnings are allocated to both common shares and participating securities based on the respective number of weighted-average shares outstanding for the period. The Company's Series C junior participating convertible preferred stock are participating securities due to their participation rights related to cash dividends declared by the Company. If dividends are distributed to the common stockholders, the Company is required to pay dividends to the holders of the preferred stock and common stock pro-rata on an as converted basis.

        Components of basic and diluted earnings per share are calculated as follows (in millions, except per share data):

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
Basic EPS
Net income attributable to common stockholders	$	21.1	$	40.6	$	72.8	$	101.3
Less: undistributed income allocated
to participating preferred
stockholders		3.8		5.3		13.2		13.1
Net income allocated to common stockholders	$	17.3	$	35.3	$	59.6	$	88.2
Weighted average common shares outstanding (basic)		121.3		103.8		121.7		103.7
	$	0.14	$	0.34	$	0.49	$	0.85
Diluted EPS
Net income attributable to common stockholders	$	21.1	$	40.6	$	72.8	$	101.3
Add: effect of dilutive convertible
debt		—		1.0		—		3.1
Less: undistributed income allocated
to participating preferred
stockholders		—		4.1		—		10.0
Net income attributable to common
stockholders	$	21.1	$	37.5	$	72.8	$	94.4
Weighted average common shares outstanding (basic)		121.3		103.8		121.7		103.7
Common shares issuable assuming dilution		35.4		36.0		34.6		36.6
Weighted average common shares outstanding (diluted)		156.7		139.8		156.3		140.3
	$	0.13	$	0.27	$	0.47	$	0.67

        Employee equity share options, unvested shares, convertible preferred stock, and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options, and non-vested share units. The dilutive effect of such equity awards is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury-stock method, the weighted average common share equivalents outstanding during each period that were excluded from the computation of diluted earnings per share because the exercise price for these options was greater than the average market price of the Company's shares of common stock during the three and nine months ended September 30, 2012 was 5.6 million and 6.1 million, respectively, and during the three and nine months ended October 2, 2011 was 5.0 million and 3.0 million, respectively.