Diluted earnings per share is calculated by dividing Net income attributable to common shareholders by the weighted average number of shares of common stock outstanding, including shares to be issued upon exercise of stock options, performance share awards and restricted stock outstanding under Exelon's LTIPs considered to be common stock equivalents. The following table sets forth the components of basic and diluted earnings per share and shows the effect of these stock options, performance share awards and restricted stock on the weighted average number of shares outstanding (in millions) used in calculating diluted earnings per share:

			Three Months Ended September 30,				Nine Months Ended September 30,
			2013		2012		2013		2012

Net income attributable to common shareholders		$	738	$	296	$	1,224	$	782

Average common shares outstanding — basic			857		854		856		804
Assumed exercise of stock options, performance share awards
	and restricted stock		3		3		4		2

Average common shares outstanding — diluted			860		857		860		806

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 20 million for the three and nine months ended September 30, 2013 and 18 million and 13 million for the three and nine months ended September 30, 2012, respectively.

Under share repurchase programs, 35 million shares of common stock are held as treasury stock with a cost of $2.3 billion as of September 30, 2013. In 2008, Exelon management decided to defer indefinitely any share repurchases.

On March 25, 2013, PECO announced that it issued a notice of redemption for all of its outstanding preferred securities with a redemption date of May 1, 2013. PECO had $87 million of cumulative preferred securities that were redeemable at its option at any time for the redemption price established when each series of securities were issued. The redemption premium of $6 million is treated as a reduction to Net income to arrive at Net income attributable to common shareholders utilized in the calculation of the earnings per share for Exelon. As a result of the redemption, PECO is now indirectly, wholly-owned by Exelon.