Diluted Earnings Per Common Share and Diluted Average Common Shares
Outstanding
For diluted earnings per common share, net income available to common
shareholders can be affected by the conversion of the registrant's convertible
preferred stock. Where the effect of this conversion would have been dilutive,
net income available to common shareholders is adjusted by the associated
preferred dividends. This adjusted net income is divided by the weighted average
number of common shares outstanding for each period plus amounts representing
the dilutive effect of stock options outstanding and the dilution resulting from
the conversion of the registrant's convertible preferred stock, if applicable.
The effect of convertible preferred stock is excluded from the computation of
diluted earnings per common share in periods in which the effect would be
antidilutive.
Diluted earnings per common share was determined as follows (shares in
thousands, dollars in millions except per-share information):
Three Months Ended
March 31
-----------------------------
1998 1997
-------------- --------------
Average common shares outstanding 949,641 945,184
Dilutive effect of
Convertible preferred stock 3,606 3,948
Stock options 20,314 23,537
-------------- --------------
Total dilutive shares 973,561 972,669
============== ==============
Income available to common shareholders $ 495 $ 851
Preferred dividends paid on dilutive convertible
preferred stock 2 2
-----------------------------
Total net income available to common shareholders
adjusted for full dilution $ 497 $ 853
============== ==============
Diluted earnings per common share $ .51 $ .88
-------------- --------------
41