Net Earnings Per Share

12 Months Ended

Oct. 31, 2011

Net Earnings Per Share

Net Earnings Per Share

Note 3: Net Earnings Per Share

        HP calculates basic earnings per share ("EPS") using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes any dilutive effect of outstanding stock options, PRUs, restricted stock units and restricted stock.

        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows for the following fiscal years ended October 31:

		2011		2010		2009
		In millions, except per share amounts
Numerator:
	Net earnings(1)	$	7,074	$	8,761	$	7,660
Denominator:
	Weighted-average shares used to compute basic EPS		2,094		2,319		2,388
	Dilutive effect of employee stock plans		34		53		49
	Weighted-average shares used to compute diluted EPS		2,128		2,372		2,437
Net earnings per share:
	Basic	$	3.38	$	3.78	$	3.21
	Diluted	$	3.32	$	3.69	$	3.14

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Net earnings available to participating securities were not significant for fiscal years 2011, 2010 and 2009. HP considers restricted stock that provides the holder with a non-forfeitable right to receive dividends to be a participating security.

        HP excludes options with exercise prices that are greater than the average market price from the calculation of diluted EPS because their effect would be anti-dilutive. In fiscal years 2011, 2010 and 2009, HP excluded from the calculation of diluted EPS options to purchase 25 million shares, 5 million shares and 85 million shares, respectively. In addition, HP also excluded from the calculation of diluted EPS options to purchase an additional 1 million shares, 2 million shares and 2 million shares in fiscal years 2011, 2010 and 2009, respectively, whose combined exercise price, unamortized fair value and excess tax benefits were greater in each of those periods than the average market price for HP's common stock because their effect would be anti-dilutive.