Sunbeam 2007 Annual Report Download - page 104

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14. Earnings Per Share Calculation
A computation of earnings per share is as follows (in millions, except per share data):
Years Ended December 31,
2007 2006 2005
Net income, as reported ....................................... $28.1 $106.0 $ 60.7
Paid-in-kind dividends on Series B and C preferred stock ......... — — (9.7)
Charges from beneficial conversions of Series B and Series C
preferred stock ........................................ — — (38.9)
Income allocable to common stockholders ......................... $28.1 $106.0 $ 12.1
Weighted average shares outstanding ............................. 71.9 65.4 52.9
Additional shares assuming conversion of stock options and restricted
stock .................................................... 1.4 1.1 1.8
Weighted average shares outstanding assuming conversion ........... 73.3 66.5 54.7
Earnings per share:
Basic .................................................. $0.39 $ 1.62 $ 0.23
Diluted ................................................. $0.38 $ 1.59 $ 0.22
Stock options and warrants to purchase approximately 3.1 million, 0.1 million and 0.1 million shares of the
Company’s common stock at December 31, 2007, 2006 and 2005 had exercise prices that exceeded the average
market price of the Company’s common stock for the three months ended December 31, 2007, 2006 and 2005,
respectively. As such, these share-based awards did not affect the computation of diluted earnings per share.
Additionally, 0.5 million shares of common stock related to the Company’s convertible debt have been excluded
from the computation of diluted earnings per share as the effect would be antidilutive.
15. Employee Benefit Plans
The Company maintains defined benefit pension plans for certain of its employees and provides certain
postretirement medical and life insurance benefits for a portion of its employees. At December 31, 2007,
substantially all the domestic pension and postretirement plans are frozen to new entrants and to future benefit
accruals.
The pension and postretirement obligations are measured as of September 30 and December 31 for 2007.
The pension and postretirement obligations are measured as of September 30 for 2006 and 2005. The pension
and postretirement obligations for 2007 measured at December 31 are the obligations resulting from the
acquisitions of K2 and Pure Fishing. For the plans measured as of December 31, the aggregate benefit obligation
and plan assets at December 31, 2007 are $89.1 and $74.8, respectively. Benefit obligations are calculated using
generally accepted actuarial methods. Actuarial gains and losses are amortized using the corridor method over
the average remaining service life of its active employees.
The following table discloses the effect on the Consolidated Balance Sheet of adopting the provisions of
SFAS 158 at December 31, 2006.
Before Application of
SFAS 158 Adjustments
After Application of
SFAS 158
Accrued pension cost ........... $ (65.6) $(1.0) $ (66.6)
Accrued postretirement benefit
cost ....................... (27.7) 8.1 (19.6)
Minimum pension liability ....... (6.5) 6.5 —
Deferred income taxes, net ....... (105.2) (5.9) (111.1)
Accumulated other comprehensive
income ..................... (18.8) (7.7) (26.5)
92