Sunbeam 2005 Annual Report Download - page 50

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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
recognize compensation cost in circumstances where the market price of the underlying stock exceeds the
exercise price of the Company’s stock options on the date of grant. The Company has restated its pro forma
compensation costs related to certain of restricted stock awards for each of the quarterly periods in 2005
(see Note 15).
The Company’s net income available to common stockholders and earnings per share had
compensation cost for the Company’s stock option plans and restricted stock been determined based on the
fair value at the grant dates would have been reduced to the pro forma amounts indicated below (in
millions, except per share data):
Years Ended
December 31,
2005 2004 2003
Net income, as reported (1) .............................................. $60.7 $ 42.4 $ 31.8
Paid-in-kind dividends on Series B and C preferred stock ................. (9.7) — —
Charges from beneficial conversions of Series B and C preferred Stock ...... (38.9) — —
Income available to common stockholders .................................. $12.1 $ 42.4 $ 31.8
Add: Total stock-based employee compensation expense included in
reported net income, net of related tax effects ........................ 38.1 32.5 21.9
Deduct: Total stock-based employee compensation expense determined
under the fair value based method for all awards, net of tax related
effects (2) ....................................................... (32.5) (35.3) (24.0)
Pro forma net income available to common stockholders ...................... $17.7 $ 39.6 $ 29.7
Basic earnings per share:
As reported ....................................................... $0.23 $ 1.03 $ 0.93
Pro forma (3) ...................................................... $0.33 $ 0.97 $ 0.87
Diluted earnings per share:
As reported ....................................................... $0.22 $ 0.99 $ 0.90
Pro forma (3) ...................................................... $0.32 $ 0.93 $ 0.84
(1) Net income and earnings per share prior to October 1, 2005 does not include stock based compensation
expense related to stock options and employee stock purchase plans.
(2) Stock-based compensation expense prior to October 1, 2005 was calculated using pro forma guidance
under SFAS 123.
(3) Pro forma net income and pro forma earnings per share prior to October 1, 2005 were calculated using
pro forma guidance under SFAS 123.
The fair value of stock options was determined using the Black-Scholes option-pricing model which
was previously used for disclosing the Company’s pro forma information under SFAS 123. The fair value of
the market-based restricted stock awards was determined using a Monte Carlo simulation embedded in a
lattice model, and for all other restricted stock awards were based on the closing price of the Company’s
common stock on the date of grant. The determination of the fair value of the Company’s stock option
awards and restricted stock awards is based on a variety of factors including, but not limited to, the
Company’s common stock price, expected stock price volatility over the term of awards, and actual and
projected exercise behavior. Additionally pursuant to SFAS 123R, the Company has estimated forfeitures
for options and restricted stock awards at the dates of grant based on historical experience and will revise as
necessary if actual forfeitures differ from these estimates.
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