Weighted average shares outstanding:


Notes to Financial Statements

NOTE 2    EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, stock awards, and shared performance stock awards. The components of basic and diluted EPS are as follows:

 

(In millions, except earnings per share)   

Three Months Ended

March 31,

   

Nine Months Ended

March 31,

 


     2012     2011     2012     2011  

Net income available for common shareholders (A)

   $   5,108      $   5,232      $   17,470      $   17,276   

Weighted average outstanding shares of common stock (B)

     8,401        8,420        8,398        8,511   

Dilutive effect of stock-based awards

     97        90        104        98   


 


 


 


Common stock and common stock equivalents (C)

     8,498        8,510        8,502        8,609   
    


 


 


 


Earnings Per Share:

                                

Basic (A/B)

   $ 0.61      $ 0.62      $ 2.08      $ 2.03   

Diluted (A/C)

   $ 0.60      $ 0.61      $ 2.05      $ 2.01   


We excluded the following shares underlying stock-based awards from the calculations of diluted EPS because their inclusion would have been anti-dilutive:

 

(In millions)   

Three Months Ended

March 31,

    

Nine Months Ended

March 31,

 


     2012      2011      2012      2011  

Shares excluded from calculations of diluted EPS

     0         18         1         22   


The decrease in anti-dilutive shares from the comparable period was due to the decrease in employee stock options outstanding and higher average share prices.

In June 2010, we issued $1.25 billion of zero-coupon debt securities that are convertible into shares of our common stock if certain conditions are met. As of March 31, 2012, none of these securities had met price or other conditions that would make them eligible for issuance and therefore were excluded from the calculation of both the basic and diluted EPS. See Note 11 – Debt for additional information.