EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):



	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net income for basic earnings per share	$	196.0	$	49.4	$	309.4	$	116.4
Add: interest expense on 7.0% Convertible Senior Debentures due 2016 (the “7.0% Debentures”), net of income taxes	3.7		3.7		11.1		9.7
Net income for diluted earnings per share	$	199.7	$	53.1	$	320.5	$	126.1
Shares:
Weighted average shares outstanding for basic earnings per share	246,965		251,045		249,673		250,942
Effect of dilutive securities on weighted average shares:
7% Debentures	53,367		53,364		53,367		47,563
Stock option and restricted stock plans	2,353		1,631		2,712		1,751
Warrants	23		—		333		—
Dilutive potential common shares	55,743		54,995		56,412		49,314
Weighted average shares outstanding for diluted earnings per share	302,708		306,040		306,085		300,256

Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Restricted shares (including our performance shares) are not included in basic earnings per share until vested. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options and

warrants were exercised and restricted stock was vested. The dilution from options, warrants and restricted shares is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options and warrants (or the unrecognized compensation expense with respect to restricted stock) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock). Initially, the 7.0% Debentures will be convertible into 182.1494 shares of our common stock for each $1,000 principal amount of 7.0% Debentures, which is equivalent to an initial conversion price of approximately $5.49 per share. The conversion rate is subject to adjustment following the occurrence of certain events in accordance with the terms of the 7.0% Debentures.