Earnings Per Share

9 Months Ended

Sep. 30, 2015

The following is a reconciliation of the shares used in calculating basic and diluted net earnings per share.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Net income (in millions)	$	88	$	106	$	226	$	241
Shares (in thousands):
Weighted average common shares outstanding	180,815		182,196		181,428		183,343
Add: Participating securities (a)	30		48		43		46
Weighted average common shares outstanding — Basic	180,845		182,244		181,471		183,389
Plus incremental shares from assumed conversions: (b)
Dilutive effect of stock options	424		646		489		655
Dilutive effect of restricted stock	363		542		376		529
Weighted average common shares outstanding — Diluted	181,632		183,432		182,336		184,573
Basic earnings per share	$	0.48	$	0.58	$	1.25	$	1.31
Diluted earnings per share	$	0.48	$	0.58	$	1.24	$	1.31


(a)	Restricted stock awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share.

(b)

Incremental shares from stock options, restricted stock and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 14, "Share-Based Compensation Plans" for further detail on the performance share units.



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in thousands)	2015	2014	2015	2014
Stock options	2,703	2,709	2,712	2,769
Restricted stock	747	534	754	532
Performance shares	191	136	187	114