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



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Net income (in millions)	$	73	$	72	$	160	$	224
Shares (in thousands):
Weighted average common shares outstanding	185,044		185,650		185,294		185,386
Add: Participating securities (a)	122		281		165		340
Weighted average common shares outstanding — Basic	185,166		185,931		185,459		185,726
Plus incremental shares from assumed conversions: (b)
Dilutive effect of stock options	175		186		180		231
Dilutive effect of restricted stock	661		231		547		195
Weighted average common shares outstanding — Diluted	186,002		186,348		186,186		186,152
Basic earnings per share	$	0.39	$	0.39	$	0.86	$	1.20
Diluted earnings per share	$	0.39	$	0.38	$	0.86	$	1.20


(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 were otherwise 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		Nine Months Ended
	September 30,		September 30,
(in thousands)	2013	2012	2013	2012
Stock options	4,414	4,332	4,342	4,382
Restricted stock	655	876	758	904
Performance shares	106	—	88	—