Ford 2014 Annual Report Download - page 170

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23. CAPITAL STOCK AND EARNINGS PER SHARE
All general voting power is vested in the holders of Common Stock and Class B Stock. Holders of our Common Stock
have 60% of the general voting power and holders of our Class B Stock are entitled to such number of votes per share as
will give them the remaining 40%. Shares of Common Stock and Class B Stock share equally in dividends when and as
paid, with stock dividends payable in shares of stock of the class held.
If liquidated, each share of Common Stock will be entitled to the first $0.50 available for distribution to holders of
Common Stock and Class B Stock, each share of Class B Stock will be entitled to the next $1.00 so available, each share
of Common Stock will be entitled to the next $0.50 so available and each share of Common and Class B Stock will be
entitled to an equal amount thereafter.
We present both basic and diluted earnings per share (“EPS”) amounts in our financial reporting. Basic EPS excludes
dilution and is computed by dividing income available to Common and Class B Stock holders by the weighted-average
number of Common and Class B Stock outstanding for the period. Diluted EPS reflects the maximum potential dilution
that could occur from our share-based compensation, including “in-the-money” stock options and unvested restricted
stock units, and, through November 19, 2014, conversion into Ford Common Stock of our convertible notes, which were
convertible through but not after that date. Potential dilutive shares are excluded from the calculation if they have an
effect in the period.
Earnings Per Share Attributable to Ford Motor Company Common and Class B Stock
Basic and diluted income per share were calculated using the following (in millions):
2014 2013 2012
Basic and Diluted Income Attributable to Ford Motor Company
Basic income $ 3,187 $7,182 $ 5,613
Effect of dilutive 2016 Convertible Notes (a) (b) 42 45 46
Effect of dilutive 2036 Convertible Notes (a) (c) — 1 2
Diluted income $ 3,229 $7,228 $ 5,661
Basic and Diluted Shares
Basic shares (average shares outstanding) 3,912 3,935 3,815
Net dilutive options and warrants (d) 46 51 101
Dilutive 2016 Convertible Notes (b) 87 98 96
Dilutive 2036 Convertible Notes (c) — 3 3
Diluted shares 4,045 4,087 4,015
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(a) As applicable, includes interest expense, amortization of discount, amortization of fees, and other changes in income or loss that would result from
the assumed conversion.
(b) In October 2014, we elected to terminate the conversion rights of holders under the 2016 Convertible Notes in accordance with their terms effective
as of the close of business on November 20, 2014. On November 21, 2014, we redeemed for cash the remaining outstanding 2016 Convertible
Notes (see Note 13).
(c) In December 2013, we elected to terminate the conversion rights of holders under the 2036 Convertible Notes in accordance with their terms
effective January 22, 2014. As a result, any 2036 Convertible Notes remaining after January 21, 2014 cannot be converted to shares and are no
longer dilutive (see Note 13).
(d) Includes (i) 53 million in average net dilutive shares for 2012 for warrants outstanding prior to exercise, and (ii) 9 million in average basic shares
outstanding for 2012 for shares issued for warrants exercised. In total, 362 million warrants were exercised by the deadline for exercise of
December 31, 2012, on a net share settlement basis, resulting in the issuance of 106 million shares.
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