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Newell Rubbermaid Inc. 2010 Annual Report
>
NEWELL RUBBERMAID 2010 Annual Report 71
The impact of the adoption of the authoritative guidance is included in the below calculation and reconciliation of basic and
diluted earnings (loss) per share for the years ended December 31, (in millions, except per share data):
2010 2009 2008
Numerator for basic earnings (loss) per share:
Net income (loss) controlling interests $ 292.8 $ 285.5 $ (52.3)
Loss from discontinued operations — — 0.5
Dividends and equivalents for share-based awards expected to be forfeited 0.1 0.2 0.6
Income (loss) from continuing operations for basic earnings (loss) per share 292.9 285.7 (51.2)
Loss from discontinued operations — — (0.5)
Net income (loss) controlling interests for basic earnings (loss) per share $ 292.9 $ 285.7 $ (51.7)
Numerator for diluted earnings (loss) per share:
Income (loss) from continuing operations for basic earnings (loss) per share $ 292.9 $ 285.7 $ (51.2)
Effect of Preferred Securities(1) — — —
Income (loss) from continuing operations for diluted earnings (loss) per share 292.9 285.7 (51.2)
Loss from discontinued operations — — (0.5)
Net income (loss) controlling interests for diluted earnings (loss) per share $ 292.9 $ 285.7 $ (51.7)
Denominator for basic and diluted earnings (loss) per share:
Weighted-average shares outstanding 279.3 277.7 277.0
Share-based payment awards classifi ed as participating securities 3.1 3.1 2.9
Denominator for basic earnings (loss) per share 282.4 280.8 279.9
Dilutive securities(2) 2.5 1.1 —
Convertible Notes(3) 13.1 9.0 —
Warrants(4) 7.4 3.5 —
Preferred Securities(1) — — —
Denominator for diluted earnings (loss) per share 305.4 294.4 279.9
Basic earnings (loss) per share:
Income (loss) from continuing operations $ 1.04 $ 1.02 $ (0.18)
Loss from discontinued operations — — —
Net income (loss) controlling interests $ 1.04 $ 1.02 $ (0.18)
Diluted earnings (loss) per share:
Income (loss) from continuing operations $ 0.96 $ 0.97 $ (0.18)
Loss from discontinued operations — — —
Net income (loss) controlling interests $ 0.96 $ 0.97 $ (0.18)
(1) The Preferred Securities are anti-dilutive for all years presented, and therefore have been excluded from diluted earnings per share. Had the convertible preferred
securities been included in the diluted earnings per share calculation, $14.0 million of expenses would have been added back to the net income (loss) for 2010,
2009 and 2008. Weighted-average shares outstanding would have increased by 8.3 million shares for 2010, 2009 and 2008.
(2) Dilutive securities include “in the money” options, non-participating restricted stock units and performance share awards. The weighted-average shares outstanding
for 2010, 2009 and 2008 exclude the effect of approximately 12.4 million, 13.2 million and 17.2 million stock options, respectively, because such options were anti-dilutive.
(3) The Convertible Notes issued in March 2009 are dilutive to the extent the average price during the period is greater than $8.61, the conversion price of the Convertible
Notes, and the Convertible Notes are only dilutive for the “in the money” portion of the Convertible Notes that could be settled with the Company’s stock. The
Convertible Notes were dilutive for 2010 and 2009, as the average price of the Company’s common stock during the quarterly periods the Convertible Notes were
outstanding was greater than $8.61. As disclosed in Footnote 9 of the Notes to Consolidated Financial Statements, $324.7 million of the $345.0 million principal
amount of the Convertible Notes was extinguished in September 2010, and as such, dilution for 2010 takes into consideration the period of time the Convertible
Notes were outstanding. The call options purchased in connection with the convertible note hedge transactions, which were settled in September 2010, had an
equal and offsetting impact to the dilution associated with the Convertible Notes. However, because the impact of the purchased call options would reduce
weighted-average shares outstanding by 13.1 million shares for 2010, the purchased call options are considered anti-dilutive securities. The authoritative accounting
guidance does not permit anti-dilutive securities to be included in weighted-average shares outstanding despite their characteristics and economic impacts. In
future periods, the remaining outstanding Convertible Notes could increase diluted average shares outstanding by a maximum of 2.4 million shares.
(4) The warrants issued in March 2009 were dilutive for the period the warrants were outstanding during the years ended December 31, 2010 and 2009 because the
average price of the Company’s common stock during quarterly periods the warrants were outstanding was greater than $11.59, the exercise price of the warrants.
As disclosed in Footnote 9 of the Notes to Consolidated Financial Statements, the warrants were settled during September 2010, and as such, dilution for 2010
takes into consideration the period of time the warrants were outstanding. Because the warrants have been settled, the warrants will not impact diluted average
shares outstanding in future periods.