General Motors 2012 Annual Report Download - page 165

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
financial statements. The calculation of the applicable market value at the date of our financial statements will apply to the full year,
irrespective of the applicable market value computed during the prior quarters of the current year.
We applied the two-class method to calculate basic earnings per share and the more dilutive of the two-class or the if-converted
method to calculate diluted earnings per share in the years ended December 31, 2012 and 2011. Under the two-class method for
computing earnings per share, undistributed earnings are allocated to common stock and the Series B Preferred Stock according to
their respective participation rights in undistributed earnings, as if all the earnings for the period had been distributed. This allocation
to the Series B Preferred Stock holders reduced Net income attributable to common stockholders, resulting in a lower basic and
dilutive earnings per share amount. Variability may result in our calculation of earnings per share from period to period depending on
whether the application of the two-class method is required.
The application of the two-class method resulted in an allocation of undistributed earnings to our Series B Preferred Stock holders
and, accordingly, 152 million common stock equivalents from the assumed conversion of the Series B Preferred Stock are not
considered outstanding for purposes of determining the weighted-average common shares outstanding in the computation of diluted
earnings per share in the years December 31, 2012 and 2011.
MLC distributed all of its 272 million warrants for our common stock to its unsecured creditors and the GUC Trust. The warrant
holders may exercise the warrants at any time prior to their respective expiration dates. Upon exercise of the warrants the shares
issued will be included in the number of basic shares outstanding used in the computation of earnings per share.
Warrants to purchase 313 million shares of our common stock were outstanding at December 31, 2012 and 2011, of which
46 million shares were not included in each year’s computation of diluted earnings per share because the warrants’ exercise price was
greater than the average market price of the common shares. Under the treasury stock method, the assumed exercise of the remaining
warrants resulted in 104 million and 130 million dilutive shares in the years ended December 31, 2012 and 2011.
Diluted earnings per share included the effect of 15 million and 13 million unvested RSUs granted to certain global executives in
the years ended December 31, 2012 and 2011.
In July 2011 the 61 million shares of common stock contributed to our pension plans in January 2011 met the criteria to qualify as
plan assets for accounting purposes. These shares were considered outstanding for earnings per share purposes beginning in July
2011.
Year Ended December 31, 2010
Warrants to purchase 318 million shares of our common stock were outstanding, of which 46 million shares were not included in
the computation of diluted earnings per share because the warrants’ exercise price was greater than the average market price of our
common stock. Under the treasury stock method, the assumed exercise of warrants to purchase the remaining warrants resulted in
106 million dilutive shares.
Diluted earnings per share included the effect of 11 million unvested RSUs granted to certain global executives. The dilutive effect
of the RSUs was included only for the period subsequent to our public offering as the RSUs prior were accounted for as liability
awards prior to that date.
Note 26. Stock Incentive Plans
Our stock incentive plans consist of the 2009 Long-Term Incentive Plan and the Salary Stock Plan. Both plans are administered by
the Executive Compensation Committee of our Board of Directors. The aggregate number of shares with respect to which awards may
be granted under these amended plans shall not exceed 75 million.
General Motors Company 2012 ANNUAL REPORT162