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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
Note 19 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share of common stock (in
millions, except shares in thousands):
2006 2005 2004
Basic Earnings per Share:
Income from continuing operations before discontinued operations and
cumulative effect of change in accounting principle ..................... $ 1,210 $ 933 $ 776
Accrued dividends on:
Series B Convertible Preferred Stock, net ........................... — — (16)
Series C Mandatory Convertible Preferred Stock ..................... (29) (58) (57)
Adjusted income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle ................. 1,181 875 703
Income from discontinued operations, net ............................... — 53 83
Cumulative effect of change in accounting principle, net ................... — (8) —
Adjusted net income available to common shareholders ................... $ 1,181 $ 920 $ 786
Weighted Average Common Shares Outstanding ......................... 943,852 957,149 834,321
Basic Earnings per Share:
Earnings from continuing operations ................................... $ 1.25 $ 0.91 $ 0.84
Earnings from discontinued operations ................................. — 0.06 0.10
Loss from cumulative effect of change in accounting principle .............. — (0.01) —
Basic Earnings per Share ...................................... $ 1.25 $ 0.96 $ 0.94
Diluted Earnings per Share:
Income from continuing operations before discontinued operations and
cumulative effect of change in accounting principle ..................... $ 1,210 $ 933 $ 776
ESOP expense adjustment, net ....................................... — — (6)
Interest on Convertible securities, net .................................. 1 1 51
Adjusted income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle ................. 1,211 934 821
Income from discontinued operations, net ............................... — 53 83
Cumulative effect of change in accounting principle, net ................... — (8) —
Adjusted net income available to common shareholders ................... $ 1,211 $ 979 $ 904
Weighted Average Common Shares Outstanding ......................... 943,852 957,149 834,321
Common shares issuable with respect to:
Stock options ................................................. 9,300 10,470 14,198
Restricted stock and performance shares ............................ 3,980 945 —
Series B Convertible Preferred Stock .............................. — — 17,359
Series C Mandatory Convertible Preferred Stock ..................... 37,398 74,797 74,797
Convertible securities .......................................... 1,992 1,992 106,272
Adjusted Weighted Average Shares Outstanding ......................... 996,522 1,045,353 1,046,947
Diluted Earnings per Share:
Earnings from continuing operations ................................... $ 1.22 $ 0.90 $ 0.78
Earnings from discontinued operations ................................. — 0.05 0.08
Loss from cumulative effect of change in accounting principle .............. — (0.01) —
Diluted Earnings per Share .................................... $ 1.22 $ 0.94 $ 0.86
The 2006, 2005 and 2004 computation of diluted earnings per share did not include the effects of 27 million,
36 million and 38 million stock options, respectively, because their respective exercise prices were greater than the
corresponding market value per share of our common stock.
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