Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

v2.4.0.8
Earnings Per Share
 6 Months Ended
Jun. 28, 2014
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]
Note 19: 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)
 
Jun 28,
2014
 
Jun 29,
2013
 
Jun 28,
2014
 
Jun 29,
2013
Net income available to common stockholders
 
$
2,796

 
$
2,000

 
$
4,726

 
$
4,045

Weighted average common shares outstanding—basic
 
4,981

 
4,978

 
4,977

 
4,963

Dilutive effect of employee equity incentive plans
 
68

 
67

 
72

 
72

Dilutive effect of convertible debt
 
74

 
61

 
71

 
58

Weighted average common shares outstanding—diluted
 
5,123

 
5,106

 
5,120

 
5,093

Basic earnings per common share
 
$
0.56

 
$
0.40

 
$
0.95

 
$
0.82

Diluted earnings per common share
 
$
0.55

 
$
0.39

 
$
0.92

 
$
0.79


We computed basic earnings per common share using net income available to common stockholders and the weighted average number of common shares outstanding during the period. We computed diluted earnings per common share using net income available to common stockholders and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Net income available to participating securities was insignificant for all periods presented.
Potentially dilutive common shares 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 restricted stock units, and the assumed issuance of common stock under the stock purchase plan. Potentially dilutive common shares are determined by applying the if-converted method for our 2005 junior subordinated convertible debentures. However, as our 2009 junior subordinated convertible debentures (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 common shares are determined by applying the treasury stock method.
During the second quarter of 2014, we excluded 9 million outstanding stock options and restricted stock units from the computation of diluted earnings per common share because these would have been antidilutive (51 million for the second quarter of 2013). During the first six months of 2014, we excluded 21 million outstanding stock options and restricted stock units from the computation of diluted earnings per common share because these would have been antidilutive (56 million for the first six months of 2013). These options could potentially be included in the diluted earnings per common share calculation in the future if the average market value of the common shares increases and is greater than the exercise price of these options.
In the second quarter of 2014 and in the second quarter of 2013, we included our 2009 debentures in the calculation of diluted earnings per common share 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.