12. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:



	Three Months Ended March 31,
	2013		2012

	(in millions, except share and per share amounts)
Numerator:
Net income attributable to common shareholders	$	42	$	85
Denominator:
Weighted-average common shares outstanding for basic earnings per share		165,703,279		172,958,012
Weighted-average effect of dilutive securities:
Employee equity awards		3,958,437		4,517,573
3.75% convertible notes⁽¹⁾		-		34,482
Weighted-average common shares outstanding for diluted earnings per share		169,661,716		177,510,067
Basic and diluted earnings per share:
Basic earnings per share	$	0.26	$	0.49
Diluted earnings per share	$	0.25	$	0.48

⁽¹⁾ In June 2012, the remaining $0.5 million of our 3.75% convertible notes outstanding was converted into 34,482 shares of common stock in accordance with the terms of the notes.

Stock options to purchase 7,125,748 shares of common stock and 4,934,596 shares of restricted stock and PSUs were outstanding at March 31, 2013. For the three months ended March 31, 2013, we included 5,855,220 of the outstanding stock options and 4,816,000 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

Stock options to purchase 9,676,899 shares of common stock, 4,671,407 shares of restricted stock and PSUs, and convertible notes convertible into 34,482 shares of common stock were outstanding at March 31, 2012. For the three months ended March 31, 2012, we included 7,140,309 of the outstanding stock options and 4,510,278 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

The 3.75% convertible notes were accounted for under the if-converted method, as we previously have settled the convertible notes in shares of our common stock. For the three months ended March 31, 2012, all of the shares underlying the outstanding 3.75% convertible notes were included in the computation of diluted earnings per share on a weighted-average basis, as their inclusion was dilutive.

The 2.50% convertible senior notes are accounted for under the treasury stock method as it is our intent and policy to settle the principal amount of the notes in cash. Based on the settlement structure of the 2.50% convertible senior notes, which permits the principal amount to be settled in cash and the conversion premium to be settled in shares of our common stock or cash, we will reflect the impact of the convertible spread portion of the convertible notes in the diluted calculation using the treasury stock method. For the three months ended March 31, 2013 and 2012, the conversion spread of our 2.50% convertible senior notes was out of the money, and as such, they were properly excluded from the computation of diluted earnings per share.