Annual report pursuant to Section 13 and 15(d)

Earnings Per Common Share

v2.4.0.6
Earnings Per Common Share
 12 Months Ended
Dec. 31, 2012
Earnings Per Share [Abstract]  
Earnings Per Share
Earnings Per Common Share
The calculation of EPS and diluted EPS for 2012, 2011 and 2010 is presented below. See Note 1 – Summary of Significant Accounting Principles for additional information on the calculation of EPS.
 
 
 
 
 
 
(Dollars in millions, except per share information; shares in thousands)
2012
 
2011
 
2010
Earnings (loss) per common share
 

 
 

 
 

Net income (loss)
$
4,188

 
$
1,446

 
$
(2,238
)
Preferred stock dividends
(1,428
)
 
(1,361
)
 
(1,357
)
Net income (loss) applicable to common shareholders
2,760

 
85

 
(3,595
)
Dividends and undistributed earnings allocated to participating securities
(2
)
 
(1
)
 
(4
)
Net income (loss) allocated to common shareholders
$
2,758

 
$
84

 
$
(3,599
)
Average common shares issued and outstanding
10,746,028

 
10,142,625

 
9,790,472

Earnings (loss) per common share
$
0.26

 
$
0.01

 
$
(0.37
)
 
 
 
 
 
 
Diluted earnings (loss) per common share
 

 
 

 
 

Net income (loss) applicable to common shareholders
$
2,760

 
$
85

 
$
(3,595
)
Dividends and undistributed earnings allocated to participating securities
(2
)
 
(1
)
 
(4
)
Net income (loss) allocated to common shareholders
$
2,758

 
$
84

 
$
(3,599
)
Average common shares issued and outstanding
10,746,028

 
10,142,625

 
9,790,472

Dilutive potential common shares (1)
94,826

 
112,199

 
—

Total diluted average common shares issued and outstanding
10,840,854

 
10,254,824

 
9,790,472

Diluted earnings (loss) per common share
$
0.25

 
$
0.01

 
$
(0.37
)
(1) 
Includes incremental shares from RSUs, restricted stock, stock options and warrants.
For 2012 and 2011, 62 million and 66 million average dilutive potential common shares associated with the Series L Preferred Stock were not included in the diluted share count because the result would have been antidilutive under the “if-converted” method. For 2010, 107 million average dilutive potential common shares associated with the Series L Preferred Stock, and the mandatory convertible Preferred Stock Series 2 and Series 3 of Merrill Lynch were not included in the diluted share count because the result would have been antidilutive under the “if-converted” method. For 2012 and 2011, 700 million and 234 million average dilutive potential common shares associated with the Series T Preferred Stock were not included in the diluted share count because the result would have been antidilutive under the “if-converted” method. For 2012, 2011 and 2010, average options to purchase 163 million, 217 million and 271 million shares, respectively, of common stock were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method. For 2012, 2011 and 2010, average warrants to purchase 272 million shares of common stock were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method.
Due to the net loss applicable to common shareholders for 2010, no dilutive potential common shares were included in the calculation of diluted EPS because they would have been antidilutive.
In 2012 and 2011, in connection with the exchanges described in Note 14 – Shareholders’ Equity, the Corporation recorded a $44 million reduction to preferred stock dividends and a net $36 million non-cash preferred stock dividend which are included in the calculation of net income allocated to common shareholders.