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• Note 18 of 18

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, 2008 (shares in thousands):

		2008			2007			2006
Basic Earnings per Share:
Net Income		$	230		$	1,135		$	1,210
Accrued dividends on Series C Mandatory Convertible Preferred Stock			—			—			(29	)
Adjusted net income available to common shareholders		$	230		$	1,135		$	1,181
Weighted Average Common Shares Outstanding			885,471			934,903			943,852
Basic Earnings per Share		$	0.26		$	1.21		$	1.25
Diluted Earnings per Share:
Net Income		$	230		$	1,135		$	1,210
Interest on Convertible securities, net			—			1			1
Adjusted net income available to common shareholders		$	230		$	1,136		$	1,211
Weighted Average Common Shares Outstanding			885,471			934,903			943,852
Common shares issuable with respect to:
Stock options			3,885			8,650			9,300
Restricted stock and performance shares			6,186			7,396			3,980
Series C Mandatory Convertible Preferred Stock			—			—			37,398
Convertible securities			—			1,992			1,992
Adjusted Weighted Average Shares Outstanding			895,542			952,941			996,522
Diluted Earnings per Share		$	0.26		$	1.19		$	1.22

The 2008, 2007 and 2006 computation of diluted earnings per share did not include the effects of 29 million, 23 million and 27 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.

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• Note 18 of 18