Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

v3.5.0.2
Earnings Per Share
 6 Months Ended
Jul. 02, 2016
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]
Note 20: Earnings Per Share
We computed our basic and diluted earnings per common share for each period as follows:
 
 
Three Months Ended
 
Six Months Ended
(In Millions, Except Per Share Amounts)
 
Jul 2,
2016
 
Jun 27,
2015
 
Jul 2,
2016
 
Jun 27,
2015
Net income available to common stockholders
 
$
1,330

 
$
2,706

 
$
3,376

 
$
4,698

Weighted average shares of common stock outstanding—basic
 
4,729

 
4,759

 
4,725

 
4,750

Dilutive effect of employee equity incentive plans
 
49

 
62

 
57

 
72

Dilutive effect of convertible debt
 
88

 
88

 
88

 
90

Weighted average shares of common stock outstanding—diluted
 
4,866

 
4,909

 
4,870

 
4,912

Basic earnings per share of common stock
 
$
0.28

 
$
0.57

 
$
0.71

 
$
0.99

Diluted earnings per share of common stock
 
$
0.27

 
$
0.55

 
$
0.69

 
$
0.96


We computed basic earnings per share of common stock using net income available to common stockholders and the weighted average number of shares of common stock outstanding during the period. We computed diluted earnings per share of common stock using net income available to common stockholders and the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period. Net income available to participating securities was insignificant for all periods presented.
Potentially dilutive shares of common stock from employee incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding RSUs, and the assumed issuance of common stock under the stock purchase plan. Potentially dilutive shares of common stock for our 2005 debentures are determined by applying the if-converted method. However, as our 2009 debentures require settlement of the principal amount of the debt in cash upon conversion, with the conversion premium paid in cash or stock at our option, potentially dilutive shares of common stock are determined by applying the treasury stock method.
Stock options and RSUs could potentially be included in the diluted earnings per share of common stock calculation in the future if the average market value of the shares of common stock increases and is greater than the exercise price of these options. During the second quarter of 2016, we excluded on average 1 million outstanding stock options and RSUs from the computation of diluted earnings per common share because these would have been antidilutive (1 million for the second quarter of 2015). During the first six months of 2016, no outstanding stock options and RSUs were excluded from the computation of diluted earnings per share of common stock (2 million for the first six months of 2015 because these shares of common stock would have been antidilutive).
In the second quarter of 2016 and 2015, we included our 2009 debentures in the calculation of diluted earnings per share of common stock because the average market price was above the conversion price. We could potentially exclude the 2009 debentures in the future if the average market price is below the conversion price.