Citibank 2012 Annual Report Download - page 209

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11. EARNINGS PER SHARE
The following is a reconciliation of the income and share data used in the basic and diluted earnings per share (EPS) computations for the years ended
December 31:
In millions, except per-share amounts 2012 2011 (1) 2010 (1)
Income from continuing operations before attribution of noncontrolling interests $ 7,909 $ 11,103 $ 10,951
Less: Noncontrolling interests from continuing operations 219 148 329
Net income from continuing operations (for EPS purposes) $ 7,690 $ 10,955 $ 10,622
Income (loss) from discontinued operations, net of taxes (149) 112 (68)
Less: Noncontrolling interests from discontinuing operations —— (48)
Citigroup’s net income $ 7,541 $ 11,067 $ 10,602
Less: Preferred dividends 26 26 9
Net income available to common shareholders $ 7,515 $ 11,041 $ 10,593
Less: Dividends and undistributed earnings allocated to employee restricted and
deferred shares with nonforfeitable rights to dividends, applicable to basic EPS 166 186 90
Net income allocated to common shareholders for basic EPS $ 7,349 $ 10,855 $ 10,503
Add: Interest expense, net of tax, on convertible securities and
adjustment of undistributed earnings allocated to employee
restricted and deferred shares with nonforfeitable rights
to dividends, applicable to diluted EPS 11 17 2
Net income allocated to common shareholders for diluted EPS $ 7,360 $ 10,872 $ 10,505
Weighted-average common shares outstanding applicable to basic EPS 2,930.6 2,909.8 2,877.6
Effect of dilutive securities
T-DECs 84.2 87.6 87.8
Other employee plans 0.6 0.5 1.9
Convertible securities 0.1 0.1 0.1
Options —0.8 0.4
Adjusted weighted-average common shares outstanding applicable to diluted EPS 3,015.5 2,998.8 2,967.8
Basic earnings per share (2)
Income from continuing operations $ 2.56 $ 3.69 $ 3.66
Discontinued operations (0.05) 0.04 (0.01)
Net income $ 2.51 $ 3.73 $ 3.65
Diluted earnings per share (2)
Income from continuing operations $ 2.49 $ 3.59 $ 3.55
Discontinued operations (0.05) 0.04 (0.01)
Net income $ 2.44 $ 3.63 $ 3.54
(1) All per-share amounts and Citigroup shares outstanding for all periods reflect Citigroup’s 1-for-10 reverse stock split which was effective May 6, 2011.
(2) Due to rounding, earnings per share on continuing operations and discontinued operations may not sum to earnings per share on net income.
During 2012, 2011 and 2010 weighted-average options to purchase
35.8 million, 24.1 million and 38.6 million shares of common stock,
respectively, were outstanding but not included in the computation of
earnings per share because the weighted-average exercise prices of $54.18,
$123.47 and $102.89, respectively, were greater than the average market price
of the Company’s common stock.
Warrants issued to the U.S. Treasury as part of the Troubled Asset Relief
Program (TARP) and the loss-sharing agreement (all of which were
subsequently sold to the public in January 2011), with an exercise price of
$178.50 and $106.10 for approximately 21.0 million and 25.5 million shares
of common stock, respectively, were not included in the computation of
earnings per share in 2012, 2011 and 2010, because they were anti-dilutive.
The final tranche of equity units held by the Abu Dhabi Investment
Authority (ADIA) converted into 5.9 million shares of Citigroup common
stock during the third quarter of 2011. Equity units of approximately
11.8 million shares of Citigroup common stock held by ADIA were not
included in the computation of earnings per share in 2010 because the
exercise price of $318.30 was greater than the average market price of the
Company’s common stock.
Pursuant to the terms of Citi’s previously outstanding Tangible Dividend
Enhanced Common Stock Securities (T-DECs), on December 17, 2012, the
Company delivered 96,337,772 shares of Citigroup common stock for the
final settlement of the prepaid stock purchase contract. The impact of these
additional shares to the weighted-average common shares outstanding
applicable to basic EPS for the year ended 2012 was negligible due to the
timing of when they were issued. The full impact of the T-DECs settlement
will be reflected in the basic earnings per share calculation for the first
quarter of 2013. The impact of the T-DECs was fully reflected in the diluted
shares and the diluted EPS for 2012, 2011 and 2010.
During the fourth quarter of 2012, Citi issued approximately $2.25 billion
of non-cumulative perpetual preferred stock. If declared by the Board of
Directors, Citi will distribute preferred dividends of approximately $97 million
relating to its preferred stock issuance during 2013.