Windstream 2013 Annual Report Download - page 187

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-51
2. Summary of Significant Accounting Policies and Changes, Continued:
A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was as follows for
the years ended December 31:
(Millions, except per share amounts) 2013 2012 2011
Basic and diluted earnings per share:
Numerator:
Income from continuing operations $ 235.0 $ 167.1 $ 169.0
Income from continuing operations allocable to participating securities (4.1)(3.6)(3.4)
Adjusted income from continuing operations attributable to
common shares 230.9 163.5 165.6
Income from discontinued operations 6.0 0.9 0.5
Income from discontinued operations allocable to participating
securities ———
Adjusted income from discontinued operations attributable to
common shares 6.0 0.9 0.5
Net income attributable to common shares $ 236.9 $ 164.4 $ 166.1
Denominator:
Basic shares outstanding
Weighted average basic shares outstanding 593.2 588.0 516.4
Weighted average participating securities (3.9)(3.5)(3.7)
Weighted average shares outstanding for basic earnings per share 589.3 584.5 512.7
Diluted shares outstanding
Weighted average shares outstanding for basic earnings per share 589.3 584.5 512.7
Effect of dilutive stock options 0.4 1.8 0.3
Weighted average shares outstanding for diluted earnings per
share 589.7 586.3 513.0
Basic and diluted earnings per share:
From continuing operations $.39 $.28 $.32
From discontinued operations .01 — —
Net income $.40 $.28 $.32
Change in Accounting Estimate
The calculation of depreciation and amortization expense is based on the estimated economic useful lives of the underlying
property, plant and equipment and finite-lived intangible assets. We periodically obtain updated depreciation studies to evaluate
whether certain useful lives remain appropriate in accordance with authoritative guidance. With the assistance of outside
expertise, we completed analyses of the depreciable lives of assets held for certain subsidiaries during the year 2012. Based on
those results, we implemented new depreciation rates resulting in a net increase to depreciation of $59.1 million and a net
decrease in net income of $36.5 million or $0.06 per share for the year ended December 31, 2012.
Recently Adopted Accounting Standards
Balance Sheet Offsetting – Effective January 1, 2013, we adopted authoritative guidance related to balance sheet offsetting.
This guidance requires enhanced disclosures for financial instruments and derivative instruments that are subject to an
enforceable master netting arrangement. Other than the additional disclosure requirements, the adoption of these changes had
no impact on our consolidated financial statements. See Note 6 for the required disclosures.