BASIC AND DILUTED EARNINGS PER COMMON SHARE

12 Months Ended

Dec. 31, 2012

BASIC AND DILUTED EARNINGS PER COMMON SHARE

14.    BASIC AND DILUTED EARNINGS PER COMMON SHARE

For each of the years ended December 31, 2012, 2011 and 2010, all outstanding options to purchase shares of Revlon, Inc. Class A common stock, par value of $0.01 per share (the “Class A Common Stock”), that could potentially dilute basic earnings per share in the future were excluded from the calculation of diluted earnings per common share as their effect would be anti-dilutive, as in each case their exercise price was in excess of the NYSE closing price of the Class A Common Stock at all times during these periods.

For each of the years ended December 31, 2012, 2011 and 2010, 3,354; 122,323; and 393,519 weighted average shares, respectively, of unvested restricted stock that could potentially dilute basic earnings per share in the future were excluded from the calculation of diluted earnings per common share as their effect would be anti-dilutive.

The components of basic and diluted earnings per share for each of the years ended December 31, 2012, 2011 and 2010 are as follows:

	Years Ended December 31,
	2012 (a)		2011 (b)		2010 (c)
Numerator:
Income from continuing operations	$	50.7	$	52.8	$	327.0
Income from discontinued operations		0.4		0.6		0.3
Net income	$	51.1	$	53.4	$	327.3
Denominator:
Weighted average common shares outstanding – Basic		52,348,636		52,173,906		51,892,824
Effect of dilutive restricted stock		8,246		157,901		409,812
Weighted average common shares outstanding – Diluted		52,356,882		52,331,807		52,302,636
Basic earnings per share:
Continuing operations	$	0.97	$	1.01	$	6.30
Discontinued operations		0.01		0.01		0.01
Net income	$	0.98	$	1.02	$	6.31
Diluted earnings per share:
Continuing operations	$	0.97	$	1.01	$	6.25
Discontinued operations		0.01		0.01		0.01
Net income	$	0.98	$	1.02	$	6.26

^(a)  Basic and diluted earnings per share for the year ended December 31, 2012 were unfavorably impacted by $24.1 million in restructuring and related charges recorded as a result of the September 2012 Program and a $8.9 million loss contingency recognized related to litigation associated with the Company’s 2009 Exchange Offer, offset in part by a non-cash benefit of $15.8 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions in the U.S. at December 31, 2012, as a result of the Company’s improved earnings trends and cumulative taxable income in those jurisdictions, which is reflected in the provision for income taxes (See Note 13, “Income Taxes”).

^(b)  Basic and diluted earnings per share for the year ended December 31, 2011 were favorably impacted by an increase in net income driven by a non-cash benefit of $16.9 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions outside the U.S. at December 31, 2011 as a result of the Company’s improved earnings trends and cumulative taxable income in those jurisdictions (See Note 13, “Income Taxes”).

^(c)  Basic and diluted earnings per share for the year ended December 31, 2010 were favorably impacted by an increase in net income driven by a non-cash benefit of $260.6 million related to the Company’s net U.S. deferred tax assets at December 31, 2010, recognized through a reduction in the Company’s deferred tax valuation allowances as a result of the Company achieving three cumulative years, as well as three consecutive years, of positive U.S. GAAP pre-tax income and taxable income in the U.S., and based upon the Company’s then-current expectations for realization of such deferred tax benefits in the U.S. (See Note 13, “Income Taxes”).