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Earnings Per Share
 3 Months Ended
Dec. 30, 2012
Earnings Per Share

(11) Earnings Per Share

The Company follows the provisions of ASC Topic 260, Earnings Per Share, which requires companies with complex capital structures, such as having two (or more) classes of securities that participate in declared dividends to calculate earnings (loss) per share (“EPS”) utilizing the two-class method. As the holders of the Preferred Stock are entitled to receive dividends with common stock on an as-converted basis, the Preferred Stock has the right to participate in undistributed earnings and must therefore be considered under the two-class method.

The following table sets forth the computation of basic and diluted EPS (share amounts in thousands):

 

     Three Months Ended  
     December 30,
2012		     January 1,
2012		  

Net income attributable to common and participating preferred stockholders

    $ 62.0      $ 23.8   
  

 

 

    

 

 

  

Participating shares at end of period:

     

Common shares outstanding

      139,724        139,346   

Preferred shares (as-converted basis)

      62,839        61,294   
  

 

 

    

 

 

  

Total

      202,563        200,640   
  

 

 

    

 

 

  

Percentage of income allocated to:

     

Common shares

      69.0 %      69.5 % 

Preferred shares

      31.0 %      30.5 % 

Net income attributable to common shares — basic

    $ 42.8      $ 16.5   
  

 

 

    

 

 

  

Dilutive adjustments to income attributable to common shares from assumed conversion of preferred shares, net of tax:

     

Income allocated to preferred shares in basic calculation

      19.2        7.3   

Reversal of preferred stock dividends and accretion

      12.1        15.7   

Reversal of income related to fair value of preferred stock conversion feature

      (68.9 )      (27.9 ) 
  

 

 

    

 

 

  

Net adjustment

      (37.6 )      (4.9 ) 
  

 

 

    

 

 

  

Net income attributable to common shares — diluted

    $ 5.2      $ 11.6   
  

 

 

    

 

 

  

Weighted-average common shares outstanding — basic

      139,483        139,346   

Dilutive effect of preferred stock

      62,839        61,294   

Dilutive effect of unvested restricted stock and restricted stock units

      1,089        6   

Dilutive effect of stock options

      786        2   
  

 

 

    

 

 

  

Weighted-average shares outstanding — diluted

      204,197        200,648   
  

 

 

    

 

 

  

Net income per common share attributable to controlling interest:

     

Basic

    $ 0.31      $ 0.12   
  

 

 

    

 

 

  

Diluted

    $ 0.03      $ 0.06   
  

 

 

    

 

 

  

The number of shares of common stock outstanding used in calculating the weighted average thereof reflects the actual number of HGI common stock outstanding, excluding nonvested restricted stock.