Note 13: Earnings Per Share
The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a nonforfeitable right to receive dividends and, therefore, are considered to participate in undistributed earnings with common shareholders.
Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares as of the balance sheet date, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table reconciles earnings per common share for 2013, 2012 and 2011:
|
| | | | | | | | | | | |
(In millions, except per share data) | 2013 |
| | 2012 |
| | 2011 |
|
Basic earnings per common share: | | | | | |
Net earnings | $ | 2,286 |
| | $ | 1,959 |
| | $ | 1,839 |
|
Less: Net earnings allocable to participating securities | (16 | ) | | (14 | ) | | (15 | ) |
Net earnings allocable to common shares | $ | 2,270 |
| | $ | 1,945 |
| | $ | 1,824 |
|
Weighted-average common shares outstanding | 1,059 |
| | 1,150 |
| | 1,271 |
|
Basic earnings per common share | $ | 2.14 |
| | $ | 1.69 |
| | $ | 1.43 |
|
Diluted earnings per common share: | | | |
| | |
|
Net earnings | $ | 2,286 |
| | $ | 1,959 |
| | $ | 1,839 |
|
Less: Net earnings allocable to participating securities | (16 | ) | | (14 | ) | | (15 | ) |
Net earnings allocable to common shares | $ | 2,270 |
| | $ | 1,945 |
| | $ | 1,824 |
|
Weighted-average common shares outstanding | 1,059 |
| | 1,150 |
| | 1,271 |
|
Dilutive effect of non-participating share-based awards | 2 |
| | 2 |
| | 2 |
|
Weighted-average common shares, as adjusted | 1,061 |
| | 1,152 |
| | 1,273 |
|
Diluted earnings per common share | $ | 2.14 |
| | $ | 1.69 |
| | $ | 1.43 |
|
Stock options to purchase 1.9 million, 7.5 million and 18.2 million shares of common stock for 2013, 2012 and 2011, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.
