Earnings Per Share and Shareholders’ Equity

Earnings Per Share

Earnings per basic share are computed based on the weighted-average number of outstanding common shares. Earnings per diluted share include the weighted-average effect of dilutive options and restricted stock on the weighted-average shares outstanding.

The following table provides shares utilized for the calculation of basic and diluted earnings per share for the third quarter of and year-to-date 2012 and 2011:



	Third Quarter				Year-to-Date
	2012		2011		2012		2011
	(in millions)
Weighted-average Common Shares:
Issued Shares	303		334		301		333
Treasury Shares	(15	)	(36	)	(11	)	(26	)
Basic Shares	288		298		290		307
Effect of Dilutive Options and Restricted Stock	6		10		7		10
Diluted Shares	294		308		297		317
Anti-dilutive Options and Awards (a)	1		1		1		1

_______________


(a)	These options and awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Shareholders’ Equity

Common Stock Repurchases

Under the authority of the Company’s Board of Directors, the Company repurchased shares of its common stock under the following repurchase programs during year-to-date 2012 and 2011:



	Amount Authorized		Shares Repurchased		Amount Repurchased				Average Stock Price of Shares Repurchased within Program
Repurchase Program	Amount Authorized		2012	2011	2012		2011		Average Stock Price of Shares Repurchased within Program
	(in millions)		(in thousands)		(in millions)
February 2012 (a)	$	500	9,816	NA	$	448	NA		$	45.60
November 2011	250		3,657	NA	164		NA		44.90
May 2011	500		NA	12,535	NA		$	468	37.30
March 2011	500		NA	13,695	NA		500		36.49
November 2010 (b)	200		NA	3,431	NA		109		31.65
Total			13,473	29,661	$	612	$	1,077

_______________


(a)	The February 2012 repurchase program had $52 million remaining as of October 27, 2012.


(b)	The November 2010 repurchase program had $31 million remaining at the time it was cancelled in conjunction with the approval of the March 2011 repurchase program.


NA	Not applicable

There were no share repurchases reflected in Accounts Payable on the October 27, 2012 Consolidated Balance Sheet.

Subsequent to October 27, 2012, the Company repurchased an additional 55 thousand shares of common stock for $2 million under the February 2012 repurchase program. In addition, subsequent to October 27, 2012, the Company's Board of Directors approved a new $250 million share repurchase program ("November 2012 repurchase program") which includes $50 million remaining under the February 2012 repurchase program. Under the November 2012 repurchase program, the Company repurchased 53 thousand shares of common stock for $2 million through November 23, 2012.

Dividends

Under the authority and declaration of the Board of Directors, the Company paid the following dividends during 2012 and 2011:



	Ordinary Dividends		Special Dividends		Total Dividends		Total Paid
	(per share)						(in millions)
2012
Third Quarter	$	0.25	$	1.00	$	1.25	$	361
Second Quarter	0.25		—		0.25		73
First Quarter	0.25		—		0.25		73
2012 Total	$	0.75	$	1.00	$	1.75	$	507
2011
Third Quarter	$	0.20	$	—	$	0.20	$	60
Second Quarter	0.20		1.00		1.20		367
First Quarter	0.20		—		0.20		64
2011 Total	$	0.60	$	1.00	$	1.60	$	491

In August 2012, the Board of Directors declared the third quarter ordinary dividend of $0.25 per share and a special dividend of $1 per share. The special dividend, totaling $287 million, was distributed on September 7, 2012 to shareholders of record at the close of business on August 23, 2012. In accordance with the anti-dilutive provisions of the 2011 Stock Option and Performance Incentive Plan, the Company adjusted both the exercise price and the number of share-based awards outstanding as of the record date of the special dividend. The aggregate fair value, the aggregate intrinsic value and the ratio of the exercise price to the market price were approximately equal immediately before and after the adjustment. Therefore, no compensation expense was recognized.