EPS Dilution

The EPS Dilution report allows you to calculate the dilutive effect of issuing equity-based compensation awards using calculations that can be distilled into six components: Average Market Price, Weighted Average Options Outstanding, Expense, Total Proceeds, Buyback Shares, and Incremental Shares (Weighted Dilutive Shares).

The EPS Dilution report directly interacts with the Expense Report (Reports - Expense) and the Deferred Tax Report. Therefore, these reports must be completed before generating the EPS Dilution Report.

1. Enter Reporting Period Start Date and End Date. This is usually the current reporting period, that being a monthly reporting period, a quarter-to-date reporting, or a year-to-date reporting period. The dates can also be used to calculate EPS Dilution for a future period or calculate the EPS Dilution for a historical period. Reporting Dates default to your last entry.

Note: Reporting period must start on or after ASC 718 adoption date, i.e., Reporting Period Start date should be greater than or equal to ASC 718 adoption date.

2. Specify a Tax Rate for the period(%). A default tax rate is required in order to generate the EPS Dilution report. There are two options when selecting the tax rate. The tax rate can be from one of two sources -

a. Tax Rate schedule: This choice derives the appropriate tax rate from the tax rate schedule based on the date. The schedule is set on the Tax Rate page under the Configure section or a grant specific tax rate that is set by uploading your Tax Rate File will be used.

b. An input Single Tax Override rate. With this choice the tax rate can be input through a box available on the screen.

a. Select an average market price. The Average Market Price (AMP) is required in order to determine whether a grant is dilutive or anti-dilutive. One Average Market Price is required per period. The choices available are:

a. This setting provides the choice of allowing negative Excess Tax Benefits values to be set to zero, or remain the actual, calculated value.

The selection determines if Liability and Non-Employee Awards will be part of the report. The choices are Yes and No.

If Liability and Non-Employee Reporting is Yes, all Liability and Non-Employee Awards in the client data will be processed and output in the report. The Universal report format will be automatically selected as the unique columns pertaining to these types of awards are captured only in that format.

This drop-down indicates whether or not to exclude grants with zero outstanding shares from the report. The underlying purpose for this is to reduce the size of the report being generated. The default is YES, exclude grants with zero outstanding shares. This setting will be carried over to subsequent selections of this report (ie. if set to NO, the next entry to this page will show NO for this setting).

Allows to specify a subset of data that should appear on the report before calculation process has been initiated. By default, up to three levels of filtering criteria can be specified. Following fixed filtering criteria is available: Grant ID, Optionee ID, Plan Name, Award Type, Award Sub Type, Grant Date, Expiration Date, Acquisition Date, Retirement-Eligibility Date, MPA Condition, Grant Settlement Type, Accounting Classification, Employee Accounting Status, Mobility ATB, 83b Election, and Vest Name.

Additional Filtering Criteria is available by uploading User Defined filtering criteria through the Uploaded Data page.

Up to three filtering values can be specified for each filtering criteria. A filtering value can be added by clicking 'Add' to the right of the filtering criteria value input box or drop-down list.

The 'Filter to Exclude' check box permits to exclude the information specified in the Advanced Filtering Criteria.

8. Report Selection: There are two types of reports. The first is the EPS Dilution report that has three levels. The second type is the Weighted Shares Exercise Select the level of report desired.

If MPA Awards are present in the dataset, the EPS Dilution Tranche-level Detail report will be generated, one each for MPA and non-MPA Awards. The Group Summary and Grant Summary will have both MPA and non-MPA awards in the same report.

a. The user selects the type of report format they would like. Either CSV or EXCEL can be selected.

b. The user selects any grouping criteria by which they would like to have their report grouped. The user has the ability to select up to three levels of grouping.