Earnings Per Share

The following is a summary of the calculation of basic and diluted net earnings per share.



	Three Months Ended
	March 31,
	2013		2012
Net income (in millions)	$	41	$	63
Shares (in thousands):
Weighted average common shares outstanding	185,573		184,963
Add: Participating securities (a)	234		435
Weighted average common shares outstanding — Basic	185,807		185,398
Plus incremental shares from assumed conversions: (b)
Dilutive effect of stock options	178		289
Dilutive effect of restricted stock	450		172
Weighted average common shares outstanding — Diluted	186,435		185,859
Basic earnings per share	$	0.22	$	0.34
Diluted earnings per share	$	0.22	$	0.34


(a)	Restricted stock awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share.

(b)Incremental shares from stock options, restricted stock and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or because they were excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 15, "Stock-Based Compensation Plans" for further detail on the performance share units.



	Three Months Ended
	March 31,
(in thousands)	2013	2012
Stock options	4,130	4,305
Restricted stock	757	843
Performance shares	40	—