HEWLETT PACKARD CO | 2013 | FY | 3

Note 3: Net Earnings Per Share

        HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock, stock options and PRUs.

        The reconciliation of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows for the following fiscal years ended October 31:

 
   2013   2012   2011  
 
   In millions, except per share
amounts
  

Numerator:

                    

Net earnings (loss)(1)

   $ 5,113   $ (12,650 ) $ 7,074  
               

Denominator:

                    

Weighted-average shares used to compute basic EPS

     1,934     1,974     2,094  

Dilutive effect of employee stock plans

     16     —     34  
               

Weighted-average shares used to compute diluted EPS

     1,950     1,974     2,128  
               

Net earnings (loss) per share:

                    

Basic

   $ 2.64   $ (6.41 ) $ 3.38  
               

Diluted(2)

   $ 2.62   $ (6.41 ) $ 3.32  
               
(1)
Net earnings (loss) available to participating securities were not significant for fiscal 2013, 2012 and 2011. HP considers restricted stock that provides the holder with a non-forfeitable right to receive dividends to be a participating security.

(2)
For fiscal 2012, HP excluded from the calculation of diluted net loss per share 10 million shares potentially issuable under employee stock plans, as their effect, if included, would have been anti-dilutive.

        HP excludes options with exercise prices that are greater than the average market price from the calculation of diluted net EPS because their effect would be anti-dilutive. In fiscal 2013, 2012 and 2011, HP excluded from the calculation of diluted net EPS options to purchase 51 million shares, 56 million shares and 25 million shares, respectively. In addition, HP also excluded from the calculation of diluted net EPS options to purchase an additional 1 million shares in fiscal 2013, 2012 and 2011, as their combined exercise price, unamortized fair value and excess tax benefits were greater in each of those periods than the average market price for HP's stock.

us-gaap:EarningsPerShareTextBlock