UPS 2014 Annual Report Download - page 120

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
108
In February 2014, we began resolution discussions with IRS Appeals related to an RAR received for tax years 2008 and
2009. In the third quarter of 2014, we reached a final resolution with IRS Appeals on all income tax matters for the 2008 and
2009 tax years. In the fourth quarter of 2014 we received a net refund of tax and interest totaling $26 million. The resolution of
these matters and subsequent refund of tax and interest did not have a material impact on net income.
A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the
ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of
unrecognized tax benefits could significantly increase or decrease within the next twelve months. Items that may cause changes
to unrecognized tax benefits include the timing of interest deductions and the allocation of income and expense between tax
jurisdictions. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the
expiration of the statute of limitations or other unforeseen circumstances. At this time, an estimate of the range of the
reasonably possible change cannot be made.
NOTE 13. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share
amounts):
2014 2013 2012
Numerator:
Net income attributable to common shareowners $ 3,032 $ 4,372 $ 807
Denominator:
Weighted average shares 913 937 957
Deferred compensation obligations 1 1 1
Vested portion of restricted shares 2 2 2
Denominator for basic earnings per share 916 940 960
Effect of dilutive securities:
Restricted performance units 7 7 8
Stock options 111
Denominator for diluted earnings per share 924 948 969
Basic earnings per share $ 3.31 $ 4.65 $ 0.84
Diluted earnings per share $ 3.28 $ 4.61 $ 0.83
Diluted earnings per share for the years ended December 31, 2014, 2013, and 2012 exclude the effect of 0.1, 0.1 and
2.6 million shares, respectively, of common stock that may be issued upon the exercise of employee stock options because such
effect would be antidilutive.