International Paper 2015 Annual Report Download - page 69

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52
adjusted to reflect the period-specific effects of applying
the new guidance. The application of the requirements
of this guidance is not expected to have a material effect
on the consolidated financial statements.
CONSOLIDATION
In February 2015, the FASB issued ASU 2015-02,
"Consolidation," which amends the requirements for
consolidation and significantly changes the
consolidation analysis required. This ASU is effective
for annual reporting periods beginning after December
15, 2015, and interim periods within those years. The
application of the requirements of this guidance is not
expected to have a material effect on the consolidated
financial statements.
SHARE-BASED PAYMENT
In June 2014, the FASB issued ASU 2014-12,
"Accounting for Share-based Payments When the
Terms of an Award Provide That Performance Target
Could Be Achieved After the Requisite Service Period."
This guidance provides that entities should treat
performance targets that can be met after the requisite
service period of a share-based payment award as
performance conditions that affect vesting. As such, an
entity should not record compensation expense related
to an award for which transfer to the employee is
contingent on the entity's satisfaction of a performance
target until it becomes probable that the performance
target will be met. This ASU is effective for annual
reporting periods beginning after December 15, 2015,
and interim periods within those years. The application
of the requirements of this guidance is not expected to
have a material effect on the consolidated financial
statements.
REVENUE RECOGNITION
In May 2014, the FASB issued ASU 2014-09, "Revenue
from Contracts with Customers." The guidance
replaces most existing revenue recognition guidance
and provides that an entity should recognize revenue
to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange
for those goods and services. This ASU is effective for
annual reporting periods beginning after December 15,
2017, and interim periods within those years, and
permits the use of either the retrospective or cumulative
effect transition method. The Company is currently
evaluating the provisions of this guidance.
NOTE 3 EARNINGS PER SHARE ATTRIBUTABLE
TO INTERNATIONAL PAPER COMPANY COMMON
SHAREHOLDERS
Basic earnings per share is computed by dividing
earnings by the weighted average number of common
shares outstanding. Diluted earnings per share is
computed assuming that all potentially dilutive
securities, including “in-the-money” stock options, were
converted into common shares.
A reconciliation of the amounts included in the
computation of basic earnings (loss) per share from
continuing operations, and diluted earnings (loss) per
share from continuing operations is as follows:
In millions, except per share
amounts 2015 2014 2013
Earnings (loss) from continuing
operations $ 938 $568 $
1,704
Effect of dilutive securities (a) ———
Earnings (loss) from continuing
operations – assuming dilution $ 938 $568 $
1,704
Average common shares
outstanding 417.4 427.7 443.3
Effect of dilutive securities (a):
Restricted performance share
plan 3.2 4.2 4.5
Stock options (b) —0.1 0.3
Average common shares
outstanding – assuming dilution 420.6 432.0 448.1
Basic earnings (loss) per share
from continuing operations $2.25 $1.33 $3.85
Diluted earnings (loss) per share
from continuing operations $2.23 $1.31 $3.80
(a) Securities are not included in the table in periods when
antidilutive.
(b) Options to purchase shares were not included in the
computation of diluted common shares outstanding if their
exercise price exceeded the average market price of the
Company’s common stock for each respective reporting date.