Graco 2005 Annual Report Download - page 63

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2005 2004 2003
Denominator:
Denominator for basic earnings per shareÌweighted-average
shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 274.4 274.4 274.1
Dilutive securities(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.5 0.3 0.2
Convertible preferred securities(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì
Denominator for diluted earnings per shareÌadjusted
weighted-average shares and assumed conversions ÏÏÏÏÏÏÏÏÏ 274.9 274.7 274.3
Basic earnings (loss) per share:
Earnings from continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1.30 $ 0.26 $ 0.79
Loss from discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.38) (0.68) (0.96)
Earnings (loss) per shareÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.92 $ (0.42) $ (0.17)
Diluted earnings (loss) per share:
Earnings from continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1.30 $ 0.26 $ 0.79
Loss from discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.38) (0.68) (0.96)
Earnings (loss) per shareÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.91 $ (0.42) $ (0.17)
(1) Dilutive securities include ""in the money options'' and restricted stock awards. The weighted average
shares outstanding for 2005, 2004 and 2003 exclude the dilutive eÅect of approximately 9.6 million,
10.6 million and 9.2 million options, respectively, because such options had an exercise price in excess
of the average market value of the Company's common stock during the respective years.
(2) The convertible preferred securities are anti-dilutive in 2005, 2004 and 2003 and, therefore, have been
excluded from diluted earnings per share. Had the convertible preferred shares been included in the
diluted earnings per share calculation, net income would be increased by $14.4 million, $16.2 million
and $16.6 million in 2005, 2004 and 2003, respectively, and weighted average shares outstanding
would be increased by 8.4 million shares, 9.7 million shares and 9.9 million shares in 2005, 2004 and
2003, respectively.
FOOTNOTE 15
Stockholders' Equity
In January 2003, the Company completed the sale of 6.67 million shares of its common stock at a
public oÅering price of $30.10 per share pursuant to an eÅective shelf registration statement that was
previously Ñled with the Securities and Exchange Commission. The net proceeds of $200.1 million were
used to reduce the Company's commercial paper borrowings.
Each share of the Company's common stock includes a stock purchase right (a ""Right''). Each Right
will entitle the holder, until the earlier of October 31, 2008 or the redemption of the Rights, to buy the
number of shares of common stock having a market value of two times the exercise price of $200.00,
subject to adjustment under certain circumstances. The Rights will be exercisable only if a person or group
acquires 15% or more of voting power of the Company or announces a tender oÅer after which it would
hold 15% or more of the Company's voting power. The Rights held by the 15% stockholder would not be
exercisable in this situation.
Furthermore, if, following the acquisition by a person or group of 15% or more of the Company's
voting stock, the Company was acquired in a merger or other business combination or 50% or more of its
assets were sold, each Right (other than Rights held by the 15% stockholder) would become exercisable
for that number of shares of common stock of the Company (or the surviving company in a business
combination) having a market value of two times the exercise price of the Right.
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