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GIS » Topics » (7) Earnings Per Share

This excerpt taken from the GIS 10-K filed Jul 11, 2008.
NOTE 12. EARNINGS PER SHARE
Basic and diluted EPS were calculated using the following:
 
                     
    Fiscal Year
   
In Millions, Except Per Share Data   2008     2007   2006
Net earnings – as reported
  $ 1,294.7     $ 1,143.9   $ 1,090.3
Capital appreciation paid on Series B-1 interests in GMC(a)
     (8.0 )     –     –
Interest on zero coupon contingently convertible debentures, after tax(b)
     –       –     8.6
Net earnings for diluted EPS calculation
  $ 1,286.7     $ 1,143.9   $ 1,098.9
Average number of common shares – basic EPS
    333.0       346.5     357.7
Incremental share effect from:
                   
Stock options(c)
     10.6       10.7     6.1
Restricted stock, restricted stock units, and other(c)
     2.8       2.0     2.1
Forward purchase contract(d)
     0.5       1.0     –
Zero coupon contingently convertible debentures(b)
     –       –     12.9
Average number of common shares – diluted EPS
    346.9       360.2     378.8
EPS – Basic
  $ 3.86     $ 3.30   $ 3.05
EPS – Diluted
  $ 3.71     $ 3.18   $ 2.90
 
 
(a) See Note 9.
 
(b) Shares from contingently convertible debentures are reflected using the if-converted method. On December 12, 2005, we completed a consent solicitation and entered into a supplemental indenture related to our zero coupon convertible debentures. We also made an irrevocable election: (i) to satisfy all future obligations to repurchase debentures solely in cash and (ii) to satisfy all future conversions of debentures (a) solely in cash up to an amount equal to the accreted value of the debentures and (b) at our discretion, in cash, stock, or a combination of cash and stock to the extent the conversion value of the debentures exceeds the accreted value. As a result of these actions, no shares of common stock underlying the debentures were considered outstanding after December 12, 2005, for purposes of calculating our diluted EPS. All outstanding debentures were redeemed or converted as of April 25, 2007.
 
(c) Incremental shares from stock options, restricted stock, and restricted stock units are computed by the treasury stock method. Stock options and restricted stock units excluded from our computation of diluted EPS because they were not dilutive were as follows:
 
                   
    Fiscal Year
   
In Millions   2008   2007   2006
Anti-dilutive stock options and restricted stock units
    4.7     6.0     8.1
 
 

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(d) On October 15, 2007, we settled a forward purchase contract with Lehman Brothers by issuing 14.3 million shares of common stock.
 
This excerpt taken from the GIS 10-Q filed Apr 3, 2006.

(7)   Earnings Per Share

We adopted Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” (EITF 04-8) in the third quarter of fiscal 2005. The adoption increased our diluted shares outstanding by 29 million shares to give effect to the contingent issuance of shares under our zero coupon convertible debentures issued in October 2002.








Page 8


Basic and diluted earnings per share were calculated using the following:

  13 Weeks Ended
39 Weeks Ended
In Millions, except per share data Feb. 26,
2006 		Feb. 27,
2005 		Feb. 26,
2006 		Feb. 27,
2005
Net earnings – as reported     $ 246   $ 230   $ 868   $ 780  
Interest on contingently convertible
   debentures, after tax		     —    5     9    15  
Net earnings for diluted earnings per
   share calculation		   $ 246   $ 235   $ 877   $ 795  
 
Average number of common shares –
   basic earnings per share		     355    366     358    372  
Incremental share effect from:  
     Stock options (a)     6    8     7    7  
     Restricted stock, restricted stock
        units and other (a)		     2    2     2    1  
     Contingently convertible debentures (b)     1    29     17    29  
Average number of common shares –
   diluted earnings per share		     364    405     384    409  
 
Earnings per Share – Basic   $ .69   $ .63   $ 2.42 $ 2.10
Earnings per Share – Diluted   $ .68   $ .58   $ 2.29 $ 1.94

(a)   Incremental shares from stock options, restricted stock and restricted stock units are computed by the treasury stock method.
 
(b)   Shares from contingently convertible debentures are reflected using the if-converted method. The number of shares deemed to be outstanding was reduced (i) in the second quarter of fiscal 2006 in connection with the debt repurchase described in Note 8 below and (ii) in the third quarter of fiscal 2006 in connection with the consent solicitation described below.

On December 12, 2005, we completed a consent solicitation and entered into a supplemental indenture related to our zero coupon convertible debentures. We also made an irrevocable election: (i) to satisfy all future obligations to repurchase debentures solely in cash and (ii) to satisfy all future conversions of debentures (a) solely in cash up to an amount equal to the accreted value of the debentures and (b) at our discretion, in cash, stock or a combination of cash and stock to the extent the conversion value of the debentures exceeds the accreted value. As a result of these actions, no shares of common stock underlying the debentures were considered outstanding after December 12, 2005, for purposes of calculating our diluted earnings per share.

This excerpt taken from the GIS 10-Q filed Oct 3, 2005.

(6)   Earnings Per Share

We adopted Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” (EITF 04-8) in the third quarter of fiscal 2005. The adoption increased our diluted shares outstanding by 29 million shares to give effect to the contingent issuance of shares under our zero coupon convertible debentures issued in October 2002. Also, net earnings used for earnings per share calculations were adjusted, using the if-converted method. Our diluted shares outstanding and earnings per share (EPS) calculations for first quarter fiscal 2005 were restated by $0.02 to present comparable information.

On September 15, 2005, we notified the holders of our convertible debentures of their right to surrender their bonds for purchase by us on October 28, 2005. We intend to satisfy this obligation in cash; however, under the provisions of EITF 04-8, our EPS calculation will include an incremental share effect until the debentures are purchased by us.


Page 7


Basic and diluted earnings per share were calculated using the following:

13 Weeks Ended
In Millions, except per share data Aug. 28,
2005 		Aug. 29,
2004
Net earnings – as reported     $ 252   $ 183  
   Interest on contingently convertible  
     debentures, after tax     5    5  
Net earnings for diluted EPS calculation   $ 257   $ 188  
Average number of common shares –  
  basic EPS (a)     365    379  
Incremental share effect from:
   Stock options (b)     6    7  
   Restricted stock, restricted stock
     units and other (b)     2    1  
   Contingently convertible debentures (c)     29    29  
Average number of common shares –
  diluted EPS     402    416  
 
Earnings per Share – Basic   $ .69   $ .48  
Earnings per Share – Diluted   $ .64   $ .45  

(a)   Computed as the weighted average of net shares outstanding on stock-exchange trading days.

(b)   Incremental shares from stock options, restricted stock and restricted stock units are computed by the “treasury stock” method.

(c)   Shares from contingently convertible debentures are reflected using the “if-converted” method.

EXCERPTS ON THIS PAGE:

10-K
Jul 11, 2008
10-Q
Apr 3, 2006
10-Q
Oct 3, 2005

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