Bank of America 2012 Annual Report Download - page 237

Bank of America 2012 235
Preferred Stock was reclassified from preferred stock to common
stock and additional paid-in capital. Because the number of
common shares issued to the Series L Preferred Stock holders
was in excess of the number of common shares issuable pursuant
to the original conversion terms, the $220 million fair value of
consideration transferred to the Series L Preferred Stock holders
in excess of the $32 million fair value of securities issuable
pursuant to the original conversion terms was recorded as a non-
cash preferred stock dividend. The dividend did not impact total
shareholders’ equity since it reduced retained earnings and
increased common stock and additional paid-in capital by the same
amount.
The table below lists the aggregate liquidation value of each
series of preferred stock exchanged in 2012 and 2011.
Preferred Stock Exchanged
Preferred
Shares
Exchanged
Liquidation
Value (1, 2)
(Dollars in millions, actual shares)
Non-convertible
Series D 260 $ 7
Series E 6,800 170
Series J 1,058 26
Series K 4,929 123
Series M 4,958 124
Series 1 1,587 47
Series 2 7,579 227
Series 3 563 17
Series 4 5,965 179
Series 5 6,134 185
Series 6 5,612 6
Total non-convertible 45,445 1,111
Convertible
Series L 269,139 269
Total exchanged 314,584 $ 1,380
(1) Amounts shown are before third-party issuance costs.
(2) Carrying value of preferred stock exchanged was $1,379 million.
The Series T Preferred Stock issued as part of the Berkshire
investment has a liquidation value of $100,000 per share and
dividends on the Series T Preferred Stock accrue on the liquidation
value at a rate per annum of six percent but will be paid only when
and if declared by the Board out of legally available funds. Subject
to the approval of the Board of Governors of the Federal Reserve
System, the Series T Preferred Stock may be redeemed by the
Corporation at any time at a redemption price of $105,000 per
share plus any accrued, unpaid dividends. The Series T Preferred
Stock has no maturity date and ranks senior to the outstanding
common stock with respect to the payment of dividends and
distributions in liquidation. At any time when dividends on the
Series T Preferred Stock have not been paid in full, the unpaid
amounts will accrue dividends at a rate per annum of eight percent
and the Corporation will not be permitted to pay dividends or other
distributions on, or to repurchase, any outstanding common stock
or any of the Corporation’s outstanding preferred stock of any
series. Following payment in full of accrued but unpaid dividends
on the Series T Preferred Stock, the dividend rate remains at eight
percent per annum.