Computation of Earnings (Loss) Per Basic/Diluted Common Share

3 Months Ended

Mar. 31, 2015

Computation of Earnings (Loss) Per Basic/Diluted Common Share

Computation of Earnings (Loss) Per Basic/Diluted Common Share

10.       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):

				For the Three Months Ended March 31,
				2015		2014
Numerator:
	Consolidated net income			$	394	$	293
		Less: Distributed earnings to unvested stock-based awards
			that participate in earnings		(4)		(5)
		Less: Undistributed earnings allocated to unvested stock-based
			awards that participate in earnings		(3)		(3)
	Numerator for basic and diluted earnings per common share – income
		available to common shareholders		$	387	$	285
Denominator:
	Denominator for basic earnings per common share - weighted-average
		common shares outstanding			723		709
	Effect of potential dilutive common shares under the treasury stock
		method:			8		11
		Denominator for diluted earnings per common share - weighted-
			average common shares outstanding plus dilutive common shares
			under the treasury stock method		731		720
Basic earnings per common share				$	0.54	$	0.40
Diluted earnings per common share				$	0.53	$	0.40

Certain of our unvested restricted stock rights (including certain restricted stock units, restricted stock awards, and performance shares) met the definition of participating securities based on their rights to dividends or dividend equivalents. Therefore, we are required to use the two-class method in our computation of basic and diluted earnings per common share. For the three months ended March31, 2015 and 2014, on a weighted-average basis, we had outstanding unvested restricted stock rights with respect to 10 million and 17 million shares of common stock, respectively, that are participating in earnings.

Certain of our employee-related restricted stock rights are contingently issuable upon the satisfaction of pre-defined performance measures. These shares are included in the weighted-average dilutive common shares only if the performance measures are met as of the end of the reporting period. Approximately 4 millionand 3 million shares are not included in the computation of diluted earnings per share for the three months ended March31, 2015 and 2014, respectively,as their respective performance measures had not yetbeen met.

Potential common shares are not included in the denominator of the diluted earnings per common share calculation when the inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded. Therefore, options to acquire 6 millionand 3 million shares of common stock were not included in the calculation of diluted earnings per common share for the three months ended March31, 2015 and 2014, respectively, as the effect of their inclusion would be anti-dilutive.