Note 11. Basic and Diluted Earnings Per Share

Basic earnings per share of common stock is computed using the weighted average number of shares of common stock outstanding during each period. The diluted earnings per share of common stock may include the effect of outstanding stock options, shares of restricted stock, or shares of our common stock held in a rabbi trust except in periods in which there is a net loss. The following table summarizes the calculation of basic and diluted earnings per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011		2010
(millions, except per share amounts)
Net Income	$	294		$	204		$	308	$	441
Earnings Adjustment from Assumed Conversion of Dilutive Shares of Common Stock in Rabbi Trust (1)		(4	)		(9	)		-		(7	)
Net Income Used for Diluted Earnings Per Share Calculation	$	290		$	195		$	308	$	434

Weighted Average Number of Shares Outstanding, Basic		176			175			176		175
Incremental Shares from Assumed Conversion of Dilutive Stock Options, Restricted Stock and Shares of Common Stock in Rabbi Trust		3			3			2		3
Weighted Average Number of Shares Outstanding, Diluted		179			178			178		178
Earnings Per Share, Basic	$	1.66		$	1.17		$	1.75	$	2.53
Earnings Per Share, Diluted		1.61			1.10			1.73		2.44

Number of antidilutive stock options, shares of restricted stock and shares of common stock in rabbi trust excluded from calculation above		2			2			3		2

(1)

The diluted earnings per share calculation includes a decrease to net income related to a deferred compensation gain from shares of our common stock held in a rabbi trust. When dilutive, the deferred compensation gain or loss (net of tax) is excluded from net income while the shares of our common stock held in the rabbi trust are included in the outstanding diluted share count.