Estee Lauder 2009 Annual Report Download - page 151

150 THE EST{E LAUDER COMPANIES INC.
of Class A Common Stock as provided for in that plan.
Share units are accompanied by dividend equivalent
rights that are converted to additional share units when
such dividends are declared. The following is a summary
of the status of the Company’s share units as of June 30,
2009 and activity during the fi scal year then ended:
Weighted-Average
Grant Date
Shares Fair Value Per Share
(Shares in thousands)
Outstanding at June 30, 2008 18.1 $39.21
Granted 4.1 33.62
Dividend equivalents 0.4 30.25
Converted — —
Outstanding at June 30, 2009 22.6 38.02
Cash Units
Certain non-employee directors defer cash compensation
in the form of cash payout share units, which are not sub-
ject to the Plans. These share units are classifi ed as liabilities
and, as such, their fair value is adjusted to refl ect the current
market value of the Company’s Class A Common Stock.
The Company recorded $0.3 million as compensation
income and $0.5 million and $0.8 million as compensation
expense to refl ect additional deferrals and the change in the
market value for fi scal 2009, 2008 and 2007, respectively.
payable in cash upon settlement of the RSU and, as such,
were valued at the closing market value of the Company’s
Class A Common Stock on the date of grant. Other RSUs
granted in fi scal 2009 are not accompanied by dividend
equivalent rights and, as such, were valued at the closing
market value of the Company’s Class A Common Stock
on the date of grant less the discounted present value of
the dividends expected to be paid on the shares during
the vesting period.
The following is a summary of the status of the
Company’s RSUs as of June 30, 2009 and activity during
the fi scal year then ended:
Weighted-Average
Grant Date
Shares Fair Value Per Share
(Shares in thousands)
Nonvested at June 30, 2008 814.0 $40.85
Granted 618.5 52.13
Vested (479.3) 40.72
Forfeited (30.7) 45.98
Nonvested at June 30, 2009 922.5 48.31
Share Units
The Company grants share units to certain non-employee
directors under the Non-Employee Director Share
Incentive Plan. The share units are convertible into shares
NOTE 17 — NET EARNINGS PER COMMON SHARE
For the years ended June 30, 2009, 2008 and 2007, net earnings per common share (“basic EPS”) is computed by dividing
net earnings by the weighted average number of common shares outstanding and contingently issuable shares (which
satisfy certain conditions). Net earnings per common share assuming dilution (“diluted EPS”) is computed by refl ecting
potential dilution from stock-based awards and contingently issuable shares.
A reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows:
YEAR ENDED JUNE 30 2009 2008 2007
(In millions, except per share data)
Numerator:
Net earnings from continuing operations $218.4 $473.8 $448.7
Discontinued operations, net of tax — — 0.5
Net earnings attributable to common stock $218.4 $473.8 $449.2
Denominator:
Weighted average common shares outstanding — Basic 196.3 193.9 204.3
Effect of dilutive stock options 0.8 2.6 3.2
Effect of restricted stock units and performance share units 0.6 0.6 0.2
Effect of contingently issuable shares pursuant to accelerated share
repurchase program — — 0.1
Weighted average common shares outstanding — Diluted 197.7 197.1 207.8
Basic net earnings per common share:
Net earnings from continuing operations $ 1.11 $ 2.44 $ 2.20
Discontinued operations, net of tax — — .00
Net earnings $ 1.11 $ 2.44 $ 2.20
Diluted net earnings per common share:
Net earnings from continuing operations $ 1.10 $ 2.40 $ 2.16
Discontinued operations, net of tax — — .00
Net earnings $ 1.10 $ 2.40 $ 2.16