Earnings per share (EPS)

9 Months Ended

Sep. 30, 2011

Earnings per share (EPS). Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock units (RSUs), are considered to be participating securities and the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below.

Computation and reconciliation of earnings per common share are as follows:



	For Three Months Ended Sept. 30, 2011						For Three Months Ended Sept. 30, 2010
	Income			Shares	EPS		Income			Shares	EPS
Basic EPS:
Net income	$	601					$	859
Less income allocated to RSUs	(10		)				(13		)
Income allocated to common stock for basic EPS calculation	$	591		1,144	$	.52	$	846		1,184	$	.71

Adjustment for dilutive shares:
Stock-based compensation plans				13						12

Diluted EPS:
Net income	$	601					$	859
Less income allocated to RSUs	(10		)				(13		)
Income allocated to common stock for diluted EPS calculation	$	591		1,157	$	.51	$	846		1,196	$	.71



	For Nine Months Ended Sept. 30, 2011						For Nine Months Ended Sept. 30, 2010
	Income			Shares	EPS		Income			Shares	EPS
Basic EPS:
Net income	$	1,938					$	2,286
Less income allocated to RSUs	(30		)				(32		)
Income allocated to common stock for basic EPS calculation	$	1,908		1,156	$	1.65	$	2,254		1,208	$	1.87

Adjustment for dilutive shares:
Stock-based compensation plans				21						13

Diluted EPS:
Net income	$	1,938					$	2,286
Less income allocated to RSUs	(29		)				(31		)
Income allocated to common stock for diluted EPS calculation	$	1,909		1,177	$	1.62	$	2,255		1,221	$	1.85

Options to purchase 50 million and 96 million shares of common stock that were outstanding during the third quarters of 2011 and 2010, respectively, and 40 million and 96 million shares outstanding during the first nine months of 2011 and 2010, respectively, were not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.