Note 8 – Earnings Per Share

Earnings per share is computed using the two-class method. Options to purchase 13.2 million shares of common stock were outstanding, but were not included in the calculation of diluted earnings per share, for the three months ended March 31, 2018, because the exercise prices of the options were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, options to purchase approximately 7.8 million shares of common stock were outstanding, but were not included in the calculation of diluted earnings per share for the three months ended March 31, 2017.

The following is a reconciliation of basic and diluted earnings per share from continuing operations for the respective periods:


	Three Months Ended
	March 31,
In millions, except per share amounts	2018		2017
Numerator for earnings per share calculation:
Income from continuing operations	$	998	$	962
Income allocated to participating securities		(2)		(4)
Net income attributable to noncontrolling interest		—		(1)
Income from continuing operations attributable to CVS Health	$	996	$	957

Denominator for earnings per share calculation:
Weighted average shares, basic		1,016		1,030
Effect of dilutive securities		3		5
Weighted average shares, diluted		1,019		1,035

Earnings per share from continuing operations:
Basic	$	0.98	$	0.93
Diluted	$	0.98	$	0.92