PROCTER & GAMBLE Co | 2013 | FY | 3

NOTE 7
EARNINGS PER SHARE
Net earnings attributable to Procter & Gamble less preferred dividends (net of related tax benefits) are divided by the weighted average number of common shares outstanding during the year to calculate basic net earnings per common share. Diluted net earnings per common share are calculated to give effect to stock options and other stock-based awards (see Note 8) and assume conversion of preferred stock (see Note 9).



Net earnings attributable to Procter & Gamble and common shares used to calculate basic and diluted net earnings per share were as follows:
Years ended June 30
2013
 
2012
 
2011
NET EARNINGS FROM CONTINUING OPERATIONS
$
11,402

 
$
9,317

 
$
11,698

Net earnings from discontinued operations
—

 
1,587

 
229

NET EARNINGS
11,402

 
10,904

 
11,927

Net earnings attributable to noncontrolling interests
(90
)
 
(148
)
 
(130
)
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE (Diluted)
11,312

 
10,756

 
11,797

Preferred dividends, net of tax benefit
(244
)
 
(256
)
 
(233
)
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE AVAILABLE TO COMMON SHAREHOLDERS (Basic)
11,068

 
10,500

 
11,564

 
 
 
 
 
 
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO PROCTER & GAMBLE AVAILABLE TO COMMON SHAREHOLDERS (Basic)
$
11,068

 
$
8,913

 
$
11,335

 
 
 
 
 
 
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO PROCTER & GAMBLE (Diluted)
$
11,312

 
$
9,169

 
$
11,568

 
 
 
 
 
 
Shares in millions; Years ended June 30
2013
 
2012
 
2011
Basic weighted average common shares outstanding
2,742.9

 
2,751.3

 
2,804.0

Effect of dilutive securities
 
 
 
 
 
Conversion of preferred shares(1)
116.8

 
123.9

 
128.5

Exercise of stock options and other unvested equity awards(2)
70.9

 
66.0

 
69.4

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,930.6

 
2,941.2

 
3,001.9

(1) 
Despite being included currently in diluted net earnings per common share, the actual conversion to common stock occurs when the preferred shares are sold. Shares may only be sold after being allocated to the ESOP participants pursuant to the repayment of the ESOP's obligations through 2035.
(2) 
Approximately 12 million in 2013, 67 million in 2012 and 93 million in 2011 of the Company's outstanding stock options were not included in the diluted net earnings per share calculation because the options were out of the money or to do so would have been antidilutive (i.e., the total proceeds upon exercise would have exceeded the market value of the underlying common shares).

us-gaap:EarningsPerShareTextBlock