Net Earnings Per Share From Continuing Operations

12 Months Ended

Dec. 31, 2020

Net Earnings Per Share From Continuing Operations

NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS Basic net earnings per share (“EPS”) from continuing operations is calculated by taking net earnings from continuing operations less the MCPS dividends divided by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed by taking net earnings from continuing operations plus the interest on the Company’s LYONs less the MCPS dividends divided by the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the years ended December 31, 2020 and 2018, 1 million options to purchase shares were not included in the diluted earnings per share calculation as the impact of their inclusion would have been anti-dilutive. For the year ended December 31, 2019, no options to purchase shares were excluded from the diluted earnings per share calculation. Basic and diluted EPS are computed independently for each quarter and annual period, which involves the use of different weighted-average share count figures relating to quarterly and annual periods. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of prior quarter-to-date EPS figures may not equal annual EPS.

The impact of the MCPS calculated under the if-converted method was anti-dilutive, and as such 17 million and 10 million shares underlying the MCPS (assuming a conversion ratio based on the December 31, 2020 and 2019 share prices, respectively) were excluded from the diluted EPS calculation for the years ended December 31, 2020 and 2019, respectively.

Information related to the calculation of net earnings from continuing operations per share of common stock for the years ended December 31 is summarized as follows ($ and shares in millions, except per share amounts):


	2020		2019		2018
Numerator:
Net earnings from continuing operations	$	3,646	$	2,432	$	2,406
MCPS dividends	(136)		(68)		—
Net earnings from continuing operations attributable to common stockholders for Basic EPS	3,510		2,364		2,406
Adjustment for interest on convertible debentures	1		2		2
Net earnings from continuing operations attributable to common stockholders after assumed conversions for Diluted EPS	$	3,511	$	2,366	$	2,408

Denominator:
Weighted average common shares outstanding used in Basic EPS	706.2		715.0		700.6
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	11.4		8.9		7.2
Assumed conversion of the convertible debentures	1.1		1.6		2.4
Weighted average common shares outstanding used in Diluted EPS	718.7		725.5		710.2

Basic EPS from continuing operations	$	4.97	$	3.31	$	3.43
Diluted EPS from continuing operations	$	4.89	$	3.26	$	3.39