General Motors 2012 Annual Report Download - page 164

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes basic and diluted earnings per share (in millions, except for per share amounts):
Years Ended December 31,
2012 2011 2010
Basic earnings per share
Net income attributable to stockholders ..................................................... $6,188 $9,190 $6,172
Less: cumulative dividends on and charge related to purchase of preferred stock and undistributed
earnings allocated to Series B Preferred Stock participating security (a) (b) ....................... 1,329 1,605 1,504
Net income attributable to common stockholders .............................................. $4,859 $7,585 $4,668
Weighted-average common shares outstanding — basic ...................................... 1,566 1,536 1,500
Basic earnings per share ................................................................. $ 3.10 $ 4.94 $ 3.11
Diluted earnings per share
Net income attributable to stockholders $6,188 $9,190 $6,172
Add: preferred dividends to holders of Series B Preferred Stock ..................................——25
Less: cumulative dividends on and charge related to purchase of preferred stock and undistributed
earnings allocated to Series B Preferred Stock participating security (a) (c) ....................... 1,301 1,552 1,504
Net income attributable to common stockholders .............................................. $4,887 $7,638 $4,693
Weighted-average common shares outstanding — diluted
Weighted-average common shares outstanding — basic ........................................ 1,566 1,536 1,500
Dilutive effect of warrants ................................................................ 104 130 106
Dilutive effect of conversion of Series B Preferred Stock .......................................——17
Dilutive effect of RSUs ..................................................................521
Weighted-average common shares outstanding — diluted ....................................... 1,675 1,668 1,624
Diluted earnings per share ................................................................ $ 2.92 $ 4.58 $ 2.89
(a) Includes earned but undeclared dividends of $26 million, $26 million and $26 million on our Series A Preferred Stock and $20
million, $20 million and $25 million on our Series B Preferred Stock in the years ended December 31, 2012, 2011 and 2010.
(b) Includes cumulative dividends on preferred stock of $859 million and earnings of $470 million that have been allocated to the
Series B Preferred Stock holders in the year ended December 31, 2012; includes cumulative dividends on preferred stock of $859
million and earnings of $746 million that have been allocated to the Series B Preferred Stock holders in the year ended
December 31, 2011; and cumulative dividends on preferred stock of $827 million and a charge related to the purchase of Series
A Preferred Stock of $677 million in the year ended December 31, 2010.
(c) Includes cumulative dividends on preferred stock of $859 million and earnings of $442 million that have been allocated to the
Series B Preferred Stock holders in the year ended December 31, 2012; includes cumulative dividends on preferred stock of $859
million and earnings of $693 million that have been allocated to the Series B Preferred Stock holders in the year ended
December 31, 2011; and cumulative dividends on preferred stock of $827 million and a charge related to the purchase of Series
A Preferred Stock of $677 million in the year ended December 31, 2010.
Years Ended December 31, 2012 and 2011
Holders of the Series B Preferred Stock have a right to participate in our undistributed earnings because a dividend, if declared,
would result in a transfer of value to the holder through an adjustment to the fixed conversion ratios through various anti-dilution
provisions. Based on the nature of the Series B Preferred Stock and the nature of these anti-dilution provisions, we have concluded
that the Series B Preferred Stock is a participating security and, as such, the application of the two-class method for computing
earnings per share is required when the applicable market value of our common stock is below $33.00 or above $39.60 per share. For
purposes of calculating earnings per share, the applicable market value is calculated as the average of the closing prices of our
common stock over the 40 consecutive trading day period ending on the third trading day immediately preceding the date of our
General Motors Company 2012 ANNUAL REPORT 161