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 (in millions, except shares in thousands):
| 2007 | 2006 | 2005 | |||||||||
| Basic Earnings per Share: | |||||||||||
|
Income from continuing operations before discontinued operations and cumulative effect of change in accounting principle |
$ | 1,135 | $ | 1,210 | $ | 933 | |||||
|
Accrued dividends on Series C Mandatory Convertible Preferred Stock |
– | (29 | ) | (58 | ) | ||||||
|
Adjusted income from continuing operations before discontinued operations and cumulative effect of change in accounting principle |
1,135 | 1,181 | 875 | ||||||||
|
Income from discontinued operations, net |
– | – | 53 | ||||||||
|
Cumulative effect of change in accounting principle, net |
– | – | (8 | ) | |||||||
|
Adjusted net income available to common shareholders |
$ | 1,135 | $ | 1,181 | $ | 920 | |||||
|
Weighted Average Common Shares Outstanding |
934,903 | 943,852 | 957,149 | ||||||||
| Basic Earnings per Share: | |||||||||||
|
Earnings from continuing operations |
$ | 1.21 | $ | 1.25 | $ | 0.91 | |||||
|
Earnings from discontinued operations |
– | – | 0.06 | ||||||||
|
Loss from cumulative effect of change in accounting principle |
– | – | (0.01 | ) | |||||||
| Basic Earnings per Share | $ | 1.21 | $ | 1.25 | $ | 0.96 | |||||
| Diluted Earnings per Share: | |||||||||||
|
Income from continuing operations before discontinued operations and cumulative effect of change in accounting principle |
$ | 1,135 | $ | 1,210 | $ | 933 | |||||
|
Interest on Convertible securities, net |
1 | 1 | 1 | ||||||||
|
Adjusted income from continuing operations before discontinued operations and cumulative effect of change in accounting principle |
1,136 | 1,211 | 934 | ||||||||
|
Income from discontinued operations, net |
– | – | 53 | ||||||||
|
Cumulative effect of change in accounting principle, net |
– | – | (8 | ) | |||||||
|
Adjusted net income available to common shareholders |
$ | 1,136 | $ | 1,211 | $ | 979 | |||||
|
Weighted Average Common Shares Outstanding |
934,903 | 943,852 | 957,149 | ||||||||
|
Common shares issuable with respect to: |
|||||||||||
|
Stock options |
8,650 | 9,300 | 10,470 | ||||||||
|
Restricted stock and performance shares |
7,396 | 3,980 | 945 | ||||||||
|
Series C Mandatory Convertible Preferred Stock |
– | 37,398 | 74,797 | ||||||||
|
Convertible securities |
1,992 | 1,992 | 1,992 | ||||||||
|
Adjusted Weighted Average Shares Outstanding |
952,941 | 996,522 | 1,045,353 | ||||||||
| Diluted Earnings per Share: | |||||||||||
|
Earnings from continuing operations |
$ | 1.19 | $ | 1.22 | $ | 0.90 | |||||
|
Earnings from discontinued operations |
– | – | 0.05 | ||||||||
|
Loss from cumulative effect of change in accounting principle |
– | – | (0.01 | ) | |||||||
| Diluted Earnings per Share | $ | 1.19 | $ | 1.22 | $ | 0.94 | |||||
The 2007, 2006 and 2005 computation of diluted earnings per share did not include the effects of 23 million, 27 million and 36 million stock options, respectively, because their respective exercise prices were greater than the corresponding market value per share of our common stock.
