NOTE 2 — EARNINGS PER SHARE
Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share 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 earnings per share are as follows:
| (In millions, except earnings per share) | ||||||
|---|---|---|---|---|---|---|
| Year Ended June 30, | 2010 | 2009 | 2008 | |||
| Net income available for common shareholders (A) | $ | 18,760 | $ | 14,569 | $ | 17,681 |
| Weighted average outstanding shares of common stock (B) | 8,813 | 8,945 | 9,328 | |||
| Dilutive effect of stock-based awards | 114 | 51 | 142 | |||
| Common stock and common stock equivalents (C) | 8,927 | 8,996 | 9,470 | |||
| Earnings Per Share | ||||||
| Basic (A/B) | $ | 2.13 | $ | 1.63 | $ | 1.90 |
| Diluted (A/C) | $ | 2.10 | $ | 1.62 | $ | 1.87 |
For fiscal years 2010, 2009, and 2008, 28 million, 342 million, and 91 million shares, respectively, were attributable to outstanding stock-based awards and were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
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. Shares of common stock into which the debt could convert were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. See also Note 12 – Debt.