Avon 2015 Annual Report Download - page 96

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Earnings (Loss) per Share
We compute earnings (loss) per share (“EPS”) using the two-class method, which is a earnings (loss) allocation formula that determines
earnings (loss) per share for common stock and participating securities. Our participating securities are our grants of restricted stock and
restricted stock units, which contain non-forfeitable rights to dividend equivalents. We compute basic EPS by dividing net income (loss)
allocated to common shareholders by the weighted-average number of shares outstanding during the year. Diluted EPS is calculated to give
effect to all potentially dilutive common shares that were outstanding during the year.
For each of the three years ended December 31 the components of basic and diluted EPS were as follows:
(Shares in millions) 2015 2014 2013
Numerator from continuing operations:
(Loss) income from continuing operations less amounts attributable
to noncontrolling interests $ (799.8) $(348.1) $ 63.0
Less: Loss (income) allocated to participating securities 10.9 4.2 (.6)
(Loss) income from continuing operations allocated to common
shareholders (788.9) (343.9) 62.4
Numerator from discontinued operations:
Loss from discontinued operations less amounts attributable to
noncontrolling interests $ (349.1) $ (40.5) $(119.4)
Less: Loss allocated to participating securities 4.7 .6 1.2
Loss from discontinued operations allocated to common
shareholders (344.4) (39.9) (118.2)
Numerator attributable to Avon:
Loss attributable to Avon less amounts attributable to
noncontrolling interests $(1,148.9) $(388.6) $ (56.4)
Less: Loss allocated to participating securities 15.7 4.7 .6
Loss attributable to Avon allocated to common shareholders (1,133.2) (383.9) (55.8)
Denominator:
Basic EPS weighted-average shares outstanding 435.2 434.5 433.4
Diluted effect of assumed conversion of stock options – – .8
Diluted EPS adjusted weighted-average shares outstanding 435.2 434.5 434.2
(Loss) Income per Common Share from continuing operations:
Basic $ (1.81) $ (.79) $ .14
Diluted (1.81) (.79) .14
Loss per Common Share from discontinued operations:
Basic $ (.79) $ (.09) $ (.27)
Diluted (.79) (.09) (.27)
Loss per Common Share attributable to Avon:
Basic $ (2.60) $ (.88) $ (.13)
Diluted (2.60) (.88) (.13)
Amounts in the table above may not necessarily sum due to rounding.
During the years ended December 31, 2015 and 2014, we did not include stock options to purchase 12.7 million shares and 18.0 million
shares of Avon common stock, respectively, in the calculations of diluted EPS as we had a loss from continuing operations, net of tax and
the inclusion of these shares would decrease the net loss per share. Since the inclusion of such shares would be anti-dilutive, these are
excluded from the calculation. During the year ended December 31, 2013, we did not include stock options to purchase 17.5 million shares
of Avon common stock in the calculation of diluted EPS because the exercise prices of those options were greater than the average market
price, and therefore, their inclusion would be anti-dilutive.
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