Income From Continuing Operations Per Common Share

9 Months Ended

Mar. 31, 2017

Income From Continuing Operations Per Common Share

The computations of income from continuing operations per common share are as follows:



	Quarter Ended						Three Quarters Ended
	March 31, 2017			April 1, 2016			March 31, 2017			April 1, 2016

	(In millions, except per share amounts)
Income from continuing operations	$	164		$	159		$	472		$	469
Adjustments for participating securities outstanding	(1		)	(1		)	(1		)	(2		)
Income from continuing operations used in per basic and diluted common share calculations (A)	$	163		$	158		$	471		$	467
Basic weighted average common shares outstanding (B)	122.6			124.0			123.3			123.7
Impact of dilutive share-based awards	1.9			1.1			1.7			1.1
Diluted weighted average common shares outstanding (C)	124.5			125.1			125.0			124.8
Income from continuing operations per basic common share (A)/(B)	$	1.33		$	1.27		$	3.82		$	3.78
Income from continuing operations per diluted common share (A)/(C)	$	1.31		$	1.26		$	3.77		$	3.74

Potential dilutive common shares primarily consist of employee stock options and performance unit awards. Employee stock options to purchase approximately 562,010 and 1,618,558 shares of our common stock were outstanding at March 31, 2017 and April 1, 2016, respectively, but were not included as dilutive stock options in the computations of net income per diluted common share because the effect would have been antidilutive.

Accelerated Share Repurchase

On February 6, 2017, we entered into a fixed-dollar accelerated share repurchase transaction agreement (“ASR”) to repurchase an aggregate of $350 million of shares of our common stock under our repurchase program. Pursuant to the ASR, on February 6, 2017 we paid $350 million and received from the counterparty an initial delivery of approximately 2.9 million shares of our common stock based on a price of $104.30 per share, representing approximately 85 percent of the total number of shares of our common stock expected to be repurchased under the ASR. The specific total number of shares ultimately repurchased under the ASR will be based on the average of the daily volume-weighted average price per share of our common stock during the term of the transaction, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR, and will be settled in two tranches. Upon settlement of each of the two tranches of the ASR, we may receive additional shares of our common stock from the counterparty or, under certain limited circumstances, be required to deliver shares of our common stock to the counterparty. On March 30, 2017, the first tranche was settled and we received from the counterparty approximately 0.1 million additional shares of our common stock. The second tranche is expected to be settled no later than the end of the fourth quarter of fiscal 2017.

We accounted for the ASR as two separate transactions for each tranche: (i) the initial delivery of shares under each tranche (the approximately 2.9 million shares described above covered both tranches), which was accounted for as treasury stock transaction; and (ii) the settlement under each tranche, which was accounted for as forward contracts indexed to our own common stock and which we determined met all the criteria for equity classification.