Ford 2004 Annual Report Download - page 80

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7 8
NOTES TO THE FINANCIAL STATEMENTS
Amounts Per Share of Common and Class B Stock
The calculation of diluted income per share of Common and Class B Stock takes into account the effect of obligations, such as
stock options and convertible securities, considered to be potentially dilutive. Basic and diluted income/(loss) per share were
calculated using the following number of shares (in millions):
NOTE 18. STOCK OPTIONS
We have stock options outstanding under two Long-term Incentive Plans (“LTIP”), the 1990 LTIP and the 1998 LTIP. No further
grants may be made under the 1990 LTIP and all outstanding options are exercisable. Grants may be made under the 1998
LTIP through April 2008. All outstanding options under the 1990 LTIP continue to be governed by the terms and conditions of
the existing option agreements for those grants. Under the 1998 LTIP, 33% of the options are generally exercisable after the first
anniversary of the date of grant, 66% after the second anniversary, and 100% after the third anniversary. Stock options expire
ten years from the grant date and, beginning January 1, 2003, are expensed. Additionally, we have outstanding performance
stock rights, restricted stock units, restricted stock grants and equivalents, and stock appreciation rights.
Under the 1998 LTIP, 2% of our issued common stock as of December 31 becomes available for granting plan awards in the
succeeding calendar year. Any unused portion is available for later years. The limit may be increased up to 3% in any year,
with a corresponding reduction in shares available for grants in future years. At December 31, 2004, the number of unused
shares carried forward aggregated to 49.7 million shares.
NOTE 17. Capital Stock and Amounts Per Share (Continued)
2004 2003 2002
Basic and Diluted Income/(Loss)
Income/(loss) from continuing operations $ 3,634 $ 902 $ 355
Preferred Stock dividends - - (15)
Basic income/(loss) from continuing operations
attributable to Common and Class B Stock 3,634 902 340
Effect of dilutive convertible preferred securities 199 - -
Diluted income/(loss) from continuing operations
attributable to Common and Class B Stock $ 3,833 $ 902 $ 340
Diluted Shares
Average shares outstanding 1,830 1,832 1,819
Restricted and uncommitted-ESOP shares (4) (2) (1)
Basic shares 1,826 1,830 1,818
Net dilutive options and restricted
and uncommitted ESOP shares 18 13 11
Dilutive convertible preferred securities 282 -* -*
Diluted shares 2,126 1,843 1,829
* Not included in calculation of diluted earnings per share due to their antidilutive effect are 282 million shares related to convertible preferred securities in
2003 and 2002.
2004 2003 2002
Weighted- Weighted- Weighted-
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
Stock Option Activity (millions) Price (millions) Price (millions) Price
Outstanding, beginning of year 234.7 $ 19.34 212.9 $ 20.88 172.1 $ 22.01
Granted 26.7 13.46 31.3 7.93 50.6 16.29
Exercised* (11.7) 10.60 (4.2) 11.06 (4.3) 7.63
Terminated/expired or surrendered (4.3) 18.68 (5.3) 19.90 (5.5) 24.37
Outstanding, end of year 245.4 19.13 234.7 19.34 212.9 20.88
Exercisable, end of year 183.0 21.41 161.7 21.44 134.0 21.02
* Exercised at option prices ranging from $7.55 to $12.53 during 2004, $10.99 to $13.54 during 2003, and $7.09 to $12.53 during 2002.