Kaman Corporation, headquartered in Bloomfield, Connecticut, was incorporated in 1945. It is a diversified company that conducts business in the aerospace and distribution markets. The following is an excerpt from the comparative income statements (beginning with earnings from continuing operations) from Kaman's 2013 annual report ($ in thousands):

An income statement sometimes includes discontinued operations. Kaman Corporation reports income from discontinued operations.

A disclosure note from Kaman's 2013 annual report is shown below:

18. COMPUTATION OF EARNINGS PER SHARE (in part)

The computation of basic earnings per share is based on net earnings divided by the weighted average number of shares of common stock outstanding for each year. The computation of diluted earnings per share includes the common stock equivalency of dilutive options granted to employees under the Stock Incentive Plan.

Excluded from the diluted earnings per share calculation for the years ended December 31, 2013, 2012 and 2011, respectively, are 391,717, 338,248 and 265,026 shares associated with equity awards granted to employees that are anti-dilutive based on the average stock price.

Required:
1. The disclosure note shows adjustments for "the common stock equivalency of dilutive options granted to employees under the Stock Incentive Plan." 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 equity awards granted to employees 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 2013, 2012, and 2011 that Kaman reports in its 2013 annual report.

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For the year ended December 31, 2012 2013 2011 In thousands, except per share amounts) Earnings from continuing operations Earnings from discontinued operations, net of tax Gain on disposal of discontinued operations, net of tax Net earnings Basic: Weighted average number of shares outstanding Diluted Weighted average number of shares outstanding Weighted average shares issuable on exercise of dilutive stock options Weighted average shares issuable on exercise of convertible notes $56,699 $53,928 $49,928 (226) 1,214 (19) 420 1,323 $57,100 $55,025 $51,142 26,744 26,425 26,246 26,744 26,425 26,246 223 31 159 240 162 35 Total 27,143 26,622 26,500