Earnings Per Common Share
The calculation of earnings per common share (EPS) and diluted EPS for 2013, 2012 and 2011 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles.
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(Dollars in millions, except per share information; shares in thousands) | 2013 | | 2012 | | 2011 |
Earnings per common share | |
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Net income | $ | 11,431 |
| | $ | 4,188 |
| | $ | 1,446 |
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Preferred stock dividends | (1,349 | ) | | (1,428 | ) | | (1,361 | ) |
Net income applicable to common shareholders | 10,082 |
| | 2,760 |
| | 85 |
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Dividends and undistributed earnings allocated to participating securities | (2 | ) | | (2 | ) | | (1 | ) |
Net income allocated to common shareholders | $ | 10,080 |
| | $ | 2,758 |
| | $ | 84 |
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Average common shares issued and outstanding | 10,731,165 |
| | 10,746,028 |
| | 10,142,625 |
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Earnings per common share | $ | 0.94 |
| | $ | 0.26 |
| | $ | 0.01 |
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Diluted earnings per common share | |
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Net income applicable to common shareholders | $ | 10,082 |
| | $ | 2,760 |
| | $ | 85 |
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Add preferred stock dividends due to assumed conversions | 300 |
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| | — |
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Dividends and undistributed earnings allocated to participating securities | (2 | ) | | (2 | ) | | (1 | ) |
Net income allocated to common shareholders | $ | 10,380 |
| | $ | 2,758 |
| | $ | 84 |
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Average common shares issued and outstanding | 10,731,165 |
| | 10,746,028 |
| | 10,142,625 |
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Dilutive potential common shares (1) | 760,253 |
| | 94,826 |
| | 112,199 |
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Total diluted average common shares issued and outstanding | 11,491,418 |
| | 10,840,854 |
| | 10,254,824 |
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Diluted earnings per common share | $ | 0.90 |
| | $ | 0.25 |
| | $ | 0.01 |
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(1) | Includes incremental shares from restricted stock units, restricted stock, stock options and warrants. |
The Corporation previously issued a warrant to purchase 700 million shares of the Corporation’s common stock to the holder of the Series T Preferred Stock. For 2013, 700 million average dilutive potential common shares associated with the Series T Preferred Stock were included in the diluted share count 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 additional information, see Note 13 – Shareholders’ Equity.
For both 2013 and 2012, 62 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 compared to 66 million for 2011. For 2013, 2012 and 2011, average options to purchase 126 million, 163 million and 217 million shares of common stock, respectively, were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method. For 2013, 2012 and 2011, 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.
In connection with the preferred stock actions described in Note 13 – Shareholders’ Equity, the Corporation recorded a $100 million non-cash preferred stock dividend in 2013, a $44 million reduction to preferred stock dividends in 2012 and a net $36 million non-cash preferred stock dividend in 2011, all of which are included in the calculation of net income allocated to common shareholders.
