Basic earnings per share (EPS) is based upon net income less preferred stock dividend requirements and includes the effects of deferrals of salary and other compensation awards that are invested in Chevron stock units by certain officers and employees of the company and the company's share of stock transactions of affiliates, which, under the applicable accounting rules, may be recorded directly to the company's retained earnings instead of net income. Diluted EPS includes the effects of these items as well as the dilutive effects of outstanding stock options awarded under the company's stock option programs (refer to Note 21, "Stock Options and Other Share-Based Compensation"). The table below sets forth the computation of basic and diluted EPS:

Year ended December 31
2007 2006 2005
Basic EPS Calculation
Income from operations $ 18,688 $ 17,138 $ 14,099
Add: Dividend equivalents paid on stock units – 1 2
Net income available to common stockholders — Basic $ 18,688 $ 17,139 $ 14,101
Weighted-average number of common shares outstanding 2,117 2,185 2,143
Add: Deferred awards held as stock units 1 1 1
Total weighted-average number of common shares outstanding 2,118 2,186 2,144
Per share of common stock
Net income — Basic $ 8.83 $ 7.84 $ 6.58
 
Diluted EPS Calculation
Income from operations $ 18,688 $ 17,138 $ 14,099
Add: Dividend equivalents paid on stock units – 1 2
Add: Dilutive effects of employee stock-based awards – – 2
Net income available to common stockholders — Diluted $ 18,688 $ 17,139 $ 14,103
Weighted-average number of common shares outstanding 2,117 2,185 2,143
Add: Deferred awards held as stock units 1 1 1
Add: Dilutive effect of employee stock-based awards 14 11 11
Total weighted-average number of common shares outstanding 2,132 2,197 2,155
Per share of common stock
Net income — Diluted $ 8.77 $ 7.80 $ 6.54