The Clorox Company is a leading manufacturer and marketer of consumer and institutional products with approximately 8,100 employees worldwide and fiscal year 2011 net sales of $5.2 billion. The following is an excerpt from the comparative income statements (beginning with earnings from continuing operations) from Clorox's 2011 annual report ($ in thousands):
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An income statement sometimes includes items that require separate presentation (net of income taxes) within the statement. The two possible separately reported items are discontinued operations and extraordinary items.
Clorox reports one of these items.
A disclosure note from Clorox's 2011 annual report is shown below:
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Required:
1. The disclosure note shows adjustments for the dilutive effect of stock options and other. What other adjustments might be needed? Explain why and how these adjustments are made to the weighted average shares outstanding.
2. The disclosure note indicates that the effect of some of the stock options were not included because they would be antidilutive. What does that mean? Why not include antidilutive securities?
3. Based on the information provided, prepare the presentation of basic and diluted earnings per share for 2011, 2010, and 2009 that Clorox reports in its 2011 annualreport.