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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
17. Earnings Per Share
Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive securities. The following
table sets forth the computation of basic EPS utilizing the net income (loss) for the respective period and the Company's basic
shares outstanding (in millions, except per share data):
Basic EPS:
Net income (loss)
Weighted average common shares outstanding(1)
Earnings (loss) per common share — basic
For the Year Ended December 31,
2010
$ 528
240.4
$ 2.19
2009
$ 555
254.2
$ 2.18
2008
$(312)
254.0
$(1.23)
The following table presents the computation of diluted EPS (dollars in millions, except per share amounts):
Diluted EPS:
Net income (loss)
Weighted average common shares outstanding(1)
Effect of dilutive securities:
Stock options, RSUs and dividend equivalent units
Weighted average common shares outstanding and common stock
equivalents
Earnings (loss) per common share — diluted
For the Year Ended December 31,
2010
$ 528
240.4
2.2
242.6
$ 2.17
2009
$ 555
254.2
1.0
255.2
$ 2.17
2008
$(312)
254.0
—
254.0
$(1.23)
____________________________
(1) For all periods prior to May 7, 2008, the date DPS distributed the common stock of DPS to Cadbury plc shareholders, the
same number of shares is being used for diluted EPS as for basic EPS as no common stock of DPS was previously outstanding
and no DPS equity awards were outstanding for the prior periods. Subsequent to May 7, 2008, the number of basic shares
includes approximately 500,000 shares related to former Cadbury benefit plans converted to DPS shares on a daily volume
weighted average. See Note 16 for further information regarding the Company's stock-based compensation plans.
Stock options, RSUs and dividend equivalent units totaling 0.4 million shares were excluded from the diluted weighted average
shares outstanding for the year ended December 31, 2010, as they were not dilutive. Stock options and RSUs totaling 1.1 million
and 0.8 million shares were excluded from the diluted weighted average shares outstanding for the years ended December 31,
2009 and 2008, respectively, as they were not dilutive.
Under the terms of our RSU agreements, unvested RSU awards contain forfeitable rights to dividends and dividend equivalent
units. Because the dividend equivalent units are forfeitable, they are defined as non-participating securities. As of December 31,
2010, there were 87,514 dividend equivalent units, having a value of $3 million, which will vest at the time that the underlying
RSU vests.
On February 24, 2010, the Board authorized an increase in the total aggregate share repurchase authorization from $200
million up to $1 billion. Subsequent to this approval, the Company repurchased and retired 31 million shares of common stock
valued at approximately $1,113 million in the year ended December 31, 2010. This amount was recorded as a reduction of equity,
primarily additional paid-in capital. On July 12, 2010, the Board authorized the repurchase of an additional $1 billion of our
outstanding common stock over the next three years, which additional authorization may be used to repurchase shares of the
Company’s common stock after the funds authorized on February 24, 2010 have been utilized.
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