Capital One 2014 Annual Report Download - page 234

NOTE 13—EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per common share:
Table 13.1: Computation of Basic and Diluted Earnings per Common Share
Year Ended December 31,
(Dollars and shares in millions, except per share data) 2014 2013 2012
Basic earnings
Income from continuing operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,423 $4,354 $3,709
Income (loss) from discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . 5(233) (217)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,428 4,121 3,492
Dividends and undistributed earnings allocated to participating securities(1) . . . . . (18) (17) (15)
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67) (53) (15)
Net income available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,343 $4,051 $3,462
Net income from continuing operations per share . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.70 $ 7.39 $ 6.56
Income (loss) from discontinued operations per share . . . . . . . . . . . . . . . . . . . . . . 0.01 (0.40) (0.39)
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.71 $ 6.99 $ 6.17
Total weighted-average basic shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 563.1 579.7 561.1
Diluted earnings(2)
Net income available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,343 $4,051 $3,462
Net income from continuing operations per share . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.58 $ 7.28 $ 6.49
Income (loss) from discontinued operations per share . . . . . . . . . . . . . . . . . . . . . . 0.01 (0.39) (0.38)
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.59 $ 6.89 $ 6.11
Total weighted-average basic shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 563.1 579.7 561.1
Effect of dilutive securities:
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 2.2 1.5
Other contingently issuable shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 1.5 1.1
Warrants(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 4.2 2.8
Total effect of dilutive securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8 7.9 5.4
Total weighted-average diluted shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 571.9 587.6 566.5
(1) Includes undistributed earnings allocated to participating securities using the two-class method under the accounting guidance for computing
earnings per share.
(2) Excluded from the computation of diluted earnings per share were 2.9 million shares related to options with exercise prices ranging from
$70.96 to $88.81, and 5.2 million shares related to options with exercise prices ranging from $56.28 to $88.81 for the years ended
December 31, 2014 and 2013, respectively, because their inclusion would be anti-dilutive. For the year ended December 31, 2012, 6.9
million shares related to options and other contingently issuable shares were excluded from the computation of diluted earnings per share
because their inclusion would be anti-dilutive; the options had exercise prices ranging from $45.75 to $89.10.
(3) Represents warrants issued as part of the U.S. Department of Treasury’s Troubled Assets Relief Program (“TARP”). As of December 31,
2014, there were 6.4 million warrants to purchase common stock outstanding, which represents approximately half of the warrants issued
in the initial offering.
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CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)