Stockholders' Equity

6 Months Ended

Sep. 30, 2012

Stockholders' Equity

(7) Stockholders’ Equity

Earnings Per Share

The two-class method is utilized for the computation of earnings per share (EPS). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Income allocated to these participating securities is excluded from net earnings allocated to common shares and was insignificant for the quarter and six months ended September 30, 2011. There were no participating securities outstanding during the quarter and six months ended September 30, 2012.

Basic earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding share-based awards and other dilutive securities using the treasury stock method.

The following table summarizes our basic and diluted EPS computations for the quarters and six months ended September 30, 2012 and 2011:

	Quarter Ended				Six Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
	(In millions, except per share data)
Basic earnings per share:
Net earnings allocated to common shares	$	97.8	$	114.7	$	152.0	$	210.4
Weighted average number of common shares outstanding		157.5		173.0		158.9		174.7
Basic earnings per share	$	0.62	$	0.66	$	0.96	$	1.20
Diluted earnings per share:
Net earnings allocated to common shares	$	97.8	$	114.7	$	152.0	$	210.4
Weighted average number of common shares outstanding		157.5		173.0		158.9		174.7
Incremental shares from assumed conversions of share-based awards		2.8		3.0		3.2		3.6
Adjusted weighted average number of common shares outstanding		160.3		176.0		162.1		178.3
Diluted earnings per share	$	0.61	$	0.65	$	0.94	$	1.18

For the quarter and six months ended September 30, 2012, 0.9 million and 0.9 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive. For the quarter and six months ended September 30, 2011, 1.5 million and 0.9 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive.

Treasury Stock

Our Board of Directors has previously authorized a total of $5.0 billion to repurchase common stock. During the quarter and six months ended September 30, 2012, we repurchased 4.8 million and 8.3 million shares, respectively, for $200.0 million and $350.0 million, respectively, under these authorizations. At September 30, 2012, approximately $500.3 million remains authorized in the stock repurchase program, which does not have an expiration date. In October 2012, our Board of Directors approved a new $1 billion stock repurchase program. We expect $750 million of the repurchase to be executed via an accelerated share repurchase agreement to be entered into during the quarter ending December 31, 2012.

During the quarter and six months ended September 30, 2012, we repurchased 0.1 million and 0.5 million shares, respectively, for $3.1 million and $20.0 million, to satisfy employee tax withholding obligations upon the vesting of share-based awards.

Shareholder Rights Agreement

On May 12, 2012, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a Right) for each outstanding common share through a shareholder rights agreement (the Rights Agreement). Each Right, once exercisable, represents the right to purchase one one-thousandth of a series B junior participating preferred share, par value $0.01, for $180, or an equivalent value of common shares determined at 50% of the then-current market price of BMC’s common stock, provided sufficient common shares are then unissued. The Rights become exercisable in the event any individual person or entity (including the ownership of their related affiliates) acquires 10% or more of the outstanding share capital of the Company without the approval of BMC’s Board of Directors, and until such time are inseparable from and trade with BMC’s common stock. The Rights have a de minimus fair value and are accounted for as a component of stockholders’ equity. The Rights Agreement expires May 11, 2013.