Notes to the Consolidated Financial Statements

(Dollars in millions, except per-share data and unless otherwise indicated)

Note 18 – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share of common stock for the three years ended December 31, 2009 (shares in thousands):

		2009				2008				2007
Basic Earnings per Share:
Net income attributable to Xerox		$	485			$	230			$	1,135
Weighted-average common shares outstanding			869,979				885,471				934,903
Basic Earnings per Share		$	0.56			$	0.26			$	1.21
Diluted Earnings per Share:
Net income attributable to Xerox		$	485			$	230			$	1,135
Interest on Convertible securities, net			1				—				1
Adjusted Net Income Available to Common Shareholders		$	486			$	230			$	1,136
Weighted-average common shares outstanding			869,979				885,471				934,903
Common shares issuable with respect to:
Stock options			462				3,885				8,650
Restricted stock and performance shares			7,087				6,186				7,396
Convertible securities			1,992				—				1,992
Adjusted Weighted-Average Shares Outstanding			879,520				895,542				952,941
Diluted Earnings per Share		$	0.55			$	0.26			$	1.19
Dividends declared per common share		$	0.17			$	0.17			$	0.0425

The 2009, 2008 and 2007 computation of diluted earnings per share did not include the effects of 39 million, 29 million and 23 million stock options, respectively, because their respective exercise prices were greater than the corresponding market value per share of our common stock. In addition, the common shares issuable with respect to convertible securities were not included in the 2008 computation of diluted EPS because to do so would have been anti-dilutive.