Chesapeake Energy 2013 Annual Report Download - page 94
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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
86
2. Earnings Per Share
Basic earnings per share (EPS) is calculated using the weighted average number of common shares outstanding
during the period and includes the effect of any participating securities as appropriate. Participating securities consist
of unvested restricted stock issued to our employees and non-employee directors that provide dividend rights.
Diluted EPS is calculated assuming issuance of common shares for all potentially dilutive securities, provided
the effect is not antidilutive. For the years ended December 31, 2013, 2012 and 2011, our contingent convertible senior
notes did not have a dilutive effect and therefore were excluded from the calculation of diluted EPS. See Note 3 for
further discussion of our contingent convertible senior notes.
For the years ended December 31, 2013 and 2012, our cumulative convertible preferred stock and participating
securities and associated adjustments to net income, consisting of dividends on such shares, were excluded from the
calculation of diluted EPS, as the effect was antidilutive. The impact of our stock options was immaterial in the calculation
of diluted EPS for these two years. The following table sets forth the net income adjustments and shares of common
stock related to our outstanding cumulative convertible preferred stock and participating securities in 2013 and 2012:
Net Income
Adjustments Shares
($ in millions) (in millions)
Year Ended December 31, 2013:
Common stock equivalent of our preferred stock outstanding:
5.75% cumulative convertible preferred stock.................................................. $ 86 56
5.75% cumulative convertible preferred stock (series A).................................. $ 63 40
5.00% cumulative convertible preferred stock (series 2005B) ......................... $ 10 5
4.50% cumulative convertible preferred stock.................................................. $ 12 6
Participating securities ......................................................................................... $ 10 5
Year Ended December 31, 2012:
Common stock equivalent of our preferred stock outstanding:
5.75% cumulative convertible preferred stock.................................................. $ 86 56
5.75% cumulative convertible preferred stock (series A).................................. $ 63 39
5.00% cumulative convertible preferred stock (series 2005B) ......................... $ 10 5
4.50% cumulative convertible preferred stock.................................................. $ 12 6
Participating securities ......................................................................................... $ — 5