Securities whose exercise or conversion is antidilutive (exercise or conversion causes EPS to increase) are excluded from the computation of diluted EPS. Diluted EPS should report the maximum potential dilution. When there is more than one potentially dilutive security, the potential dilutive effect of individual securities is determined first by calculating earnings per incremental share. Securities are then sequentially incremental share (i.e., those with the highest dilutive potential effect) are included first.