Earnings Per Share

9 Months Ended

Oct. 02, 2011

NOTE 8 — EARNINGS PER SHARE

The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal third quarters ended October 2, 2011 and October 3, 2010:


	Fiscal Third Quarters Ended
	October 2,			October 3,
(Shares in Millions)	2011			2010
Basic net earnings per share	$	1.17		$	1.24
Average shares outstanding — basic		2,737.0			2,751.6
Potential shares exercisable under stock option plans		165.0			149.6
Less: shares which could be repurchased under treasury stock method		(127.4	)		(118.4	)
Convertible debt shares		3.6			3.6
Average shares outstanding — diluted		2,778.2			2,786.4
Diluted earnings per share	$	1.15		$	1.23

The diluted earnings per share calculation for both fiscal third quarters ended October 2, 2011 and October 3, 2010 included the dilutive effect of convertible debt that was offset by the related reduction in interest expense.

The diluted earnings per share calculation for the fiscal third quarters ended October 2, 2011 and October 3, 2010, excluded 51 million and 86 million shares, respectively, related to stock options, as the exercise price of these options was greater than their average market value, which would result in an anti-dilutive effect on diluted earnings per share.

The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal nine months ended October 2, 2011 and October 3, 2010:


	Fiscal Nine Months Ended
	October 2,			October 3,
(Shares in Millions)	2011			2010
Basic net earnings per share	$	3.45		$	4.14
Average shares outstanding — basic		2,738.5			2,754.2
Potential shares exercisable under stock option plans		164.7			149.9
Less: shares which could be repurchased under treasury stock method		(129.2	)		(115.7	)
Convertible debt shares		3.6			3.6
Average shares outstanding — diluted		2,777.6			2,792.0
Diluted earnings per share	$	3.40		$	4.08

The diluted earnings per share calculation for both the fiscal nine months ended October 2, 2011 and October 3, 2010 included the dilutive effect of convertible debt that was offset by the related reduction in interest expense.

The diluted earnings per share calculation for the fiscal nine months ended October 2, 2011 and October 3, 2010 excluded 51 million and 85 million shares related to stock options, as the exercise price of these options was greater than their average market value, which would result in an anti-dilutive effect on diluted earnings per share.