Bank of America 2013 Annual Report Download - page 238

236 Bank of America 2013
NOTE 15 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.
(Dollars in millions, except per share information; shares in thousands) 2013 2012 2011
Earnings per common share
Net income $ 11,431 $ 4,188 $ 1,446
Preferred stock dividends (1,349)(1,428) (1,361)
Net income applicable to common shareholders 10,082 2,760 85
Dividends and undistributed earnings allocated to participating securities (2) (2)(1)
Net income allocated to common shareholders $ 10,080 $ 2,758 $ 84
Average common shares issued and outstanding 10,731,165 10,746,028 10,142,625
Earnings per common share $ 0.94 $ 0.26 $ 0.01
Diluted earnings per common share
Net income applicable to common shareholders $ 10,082 $ 2,760 $ 85
Add preferred stock dividends due to assumed conversions 300 ——
Dividends and undistributed earnings allocated to participating securities (2) (2)(1)
Net income allocated to common shareholders $ 10,380 $ 2,758 $ 84
Average common shares issued and outstanding 10,731,165 10,746,028 10,142,625
Dilutive potential common shares (1) 760,253 94,826 112,199
Total diluted average common shares issued and outstanding 11,491,418 10,840,854 10,254,824
Diluted earnings per common share $ 0.90 $ 0.25 $ 0.01
(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.