Earnings Per Share
9 Months Ended
Sep. 30, 2011
Earnings per share [Abstract] 
Earnings Per Share

2. Earnings Per Share:

 

Basic earnings per share (EPS) is calculated by dividing net income (the numerator) by the weighted-average number of shares of common stock (other than unvested restricted stock and restricted stock units) outstanding during the period (the denominator). Diluted earnings per share incorporate the dilutive impact of outstanding stock options and unvested restricted stock and restricted stock units (using the treasury stock method). Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of unrecognized compensation expense related to unvested stock-based compensation grants and the amount of excess tax benefits that would be recorded when the award becomes deductible are assumed to be used to repurchase shares. Please see Note 11, “Stock-Based Compensation.”

 

The following is the calculation of basic and diluted weighted-average shares outstanding and EPS for the indicated periods:

 

     
  Three Months Ended September 30, Nine Months Ended September 30,
          
  2011 2010 2011 2010
             
  (In millions, except per share data)
Income (numerator):            
 Net income basic and diluted  $ 269 $ 161 $ 471 $ 501
               
Weighted-average shares (denominator):            
 Weighted-average shares — basic    134   132   134   132
 Dilution effect of stock options and unvested restricted stock             
  and restricted stock units outstanding at end of period (1)   1   2   1   2
 Weighted-average shares — diluted    135   134   135   134
               
Earnings per share:            
 Basic  $ 2.00 $ 1.22 $ 3.52 $ 3.80
 Diluted  $ 1.99 $ 1.20 $ 3.49 $ 3.75
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(1)The calculation of shares outstanding for diluted EPS does not include the effect of one million unvested restricted stock and restricted stock units for each of the three and nine-month periods ended September 30, 2011 and 2010, respectively, because to do so would be anti-dilutive.