Computation of Basic/Diluted Earnings Per Common Share

6 Months Ended

Jun. 30, 2013

Computation of Basic/Diluted Earnings Per Common Share

Computation of basic/diluted earnings per common share

9.       Computation of basic/diluted earnings per common share

The following table sets forth the computation of basic and diluted earnings per common share (amounts in millions, except per share data):

				Three Months Ended June 30,				Six months ended June 30,
				2013		2012		2013		2012
Numerator:
	Consolidated net income			$	324	$	185	$	780	$	569
		Less: Distributed earnings to unvested
			stock-based awards that participate
			in earnings		---		---		(4)		(4)
		Less: Undistributed earnings allocated to
			unvested stock-based awards that
			participate in earnings		(6)		(4)		(12)		(7)
	Numerator for basic and diluted earnings per
		common share - net income available to
		common shareholders			318		181		764		558
Denominator:
	Denominator for basic earnings per common
		share - weighted-average common
		shares outstanding			1,118		1,109		1,116		1,115
	Effect of potential dilutive common shares
		under the treasury stock method:
		Employee stock options			9		6		8		6
		Denominator for diluted earnings per
			common share - weighted-average
			common shares outstanding plus
			dilutive effect of employee stock
			options		1,127		1,115		1,124		1,121
Basic earnings per common share				$	0.28	$	0.16	$	0.68	$	0.50
Diluted earnings per common share				$	0.28	$	0.16	$	0.68	$	0.50

Our unvested restricted stock rights, which consist of restricted stock units, restricted stock awards, and performance shares,are considered participating securities, as these securities generally have non-forfeitable rights to dividends or dividend equivalents during the contractual period of the award. Since the unvested restricted stock rights are considered participating securities, we are required to use the two-class method in our computation of basic and diluted earnings per common share. For the three and six months ended June 30, 2013, we had outstanding unvested restricted stock rights with respect to24 million and 25 million shares of common stock on a weighted-average basis, respectively.For the three and six months ended June 30, 2012, we had outstanding unvested restricted stock rights with respect to24 million and 22 million shares of common stock on a weighted-average basis, respectively.

Potential common shares are not included in the denominator of the diluted earnings per common share calculation when inclusion of such shares would be anti-dilutive. Therefore, options to acquire 8 million and 9 million shares of common stock were not included in the calculation of diluted earnings per common share for the three and six months ended June 30,2013, respectively, and options to acquire 20 million shares of common stock were not included in the calculation of diluted earnings per common share for both the three and six months ended June 30,2012.