EARNINGS PER SHARE
The Company presents both basic and diluted earnings per share (EPS) amounts. Basic EPS is calculated by dividing net income attributable to Johnson Controls, Inc. by the weighted average number of common shares outstanding during the reporting period. Diluted EPS is calculated by dividing net income attributable to Johnson Controls, Inc. by the weighted average number of common shares and common equivalent shares outstanding during the reporting period that are calculated using the treasury stock method for stock options and unvested restricted stock. The treasury stock method assumes that the Company uses the proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall tax benefits that would be credited to capital in excess of par value when the award generates a tax deduction. If there would be a shortfall resulting in a charge to capital in excess of par value, such an amount would be a reduction of the proceeds. For unvested restricted stock, assumed proceeds under the treasury stock method would include unamortized compensation cost and windfall tax benefits or shortfalls.
The Company’s outstanding Equity Units due 2042 are reflected in diluted earnings per share using the “if-converted” method. Under this method, if dilutive, the common stock is assumed issued as of the beginning of the reporting period and included in calculating diluted earnings per share. In addition, if dilutive, interest expense, net of tax, related to the outstanding Equity Units is added back to the numerator in calculating diluted earnings per share.
The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share (in millions):
|
| | | | | | | | | | | |
| Year Ended September 30, |
| 2013 | | 2012 | | 2011 |
Income Available to Common Shareholders | | | | | |
Basic income available to common shareholders | $ | 1,178 |
| | $ | 1,184 |
| | $ | 1,415 |
|
Interest expense, net of tax | — |
| | 1 |
| | 3 |
|
Diluted income available to common shareholders | $ | 1,178 |
| | $ | 1,185 |
| | $ | 1,418 |
|
| | | | | |
Weighted Average Shares Outstanding | | | | | |
Basic weighted average shares outstanding | 683.7 |
| | 681.5 |
| | 677.7 |
|
Effect of dilutive securities: | | | | | |
Stock options and unvested restricted stock | 5.5 |
| | 5.2 |
| | 8.1 |
|
Equity units | — |
| | 1.9 |
| | 4.1 |
|
Diluted weighted average shares outstanding | 689.2 |
| | 688.6 |
| | 689.9 |
|
| | | | | |
Antidilutive Securities | | | | | |
Options to purchase common shares | 0.8 |
| | 1.4 |
| | 0.3 |
|
During the three months ended September 30, 2013 and 2012, the Company declared a dividend of $0.19 and $0.18, respectively, per common share. During the twelve months ended September 30, 2013 and 2012, the Company declared four quarterly dividends totaling $0.76 and $0.72, respectively, per common share. With the exception of the quarterly dividend declared and paid in the three months ended December 31, 2012, the Company paid all dividends in the month subsequent to the end of each fiscal quarter.
