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 adjusted to include the potentially dilutive effect of stock options, performance share awards, restricted stock outstanding under Exelon's LTIPs, and Exelon's equity forward sales agreement, which is further described in Note 10 – Debt and Credit Agreements. 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 June 30,				Six Months Ended June 30,
			2014		2013		2014		2013

Net income attributable to common shareholders		$	522	$	490	$	612	$	486

Average common shares outstanding — basic			860		856		860		856
Potentially dilutive effect of stock options, performance share awards,
	restricted stock, and Exelon's equity forward sales agreement		4		4		3		3

Average common shares outstanding — diluted			864		860		863		859

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 16 million for the three and six months ended June 30, 2014 and 17 million and 18 million for the three and six months ended June 30, 2013, 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 June 30, 2014. 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.