Earnings Per Share

12 Months Ended

Dec. 31, 2016

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



	Year Ended December 31,
	2016		2015		2014
Net Income (in millions)	$	260	$	340	$	337
Shares (in thousands):
Weighted average common shares outstanding	179,069		180,854		183,030
Add: Participating securities (a)	37		39		47
Weighted average common shares outstanding — Basic	179,106		180,893		183,077
Plus incremental shares from assumed conversions: (b)
Dilutive effect of stock options	499		465		643
Dilutive effect of restricted stock units and performance share units	433		379		529
Weighted average common shares outstanding — Diluted	180,038		181,737		184,249
Basic earnings per share	$	1.45	$	1.88	$	1.84
Diluted earnings per share	$	1.45	$	1.87	$	1.83


(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 units 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 units and performance share units, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Performance share units are included in the treasury stock calculation of diluted earnings per share based upon achievement of underlying performance and market conditions at the end of the reporting period, as applicable. See Note 15, "Stock-Based Compensation Plans" for further detail on the performance share units.



	Year Ended December 31,
(in thousands)	2016	2015	2014
Stock options	1,892	2,616	2,720
Restricted stock units	514	723	525
Performance share units	373	181	119