Ford 2010 Annual Report Download - page 164

Notes to the Financial Statements
162 Ford Motor Company | 2010 Annual Report
NOTE 25. CAPITAL STOCK AND AMOUNTS PER SHARE (Continued)
We present both basic and diluted earnings per share ("EPS") amounts in our financial reporting. EPS is computed
independently each quarter for income from continuing operations, income/(loss) from discontinued operations, and net
income; as a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal
the total per-share amount for net earnings. Basic EPS excludes dilution and is computed by dividing income available to
Common Stock holders by the weighted-average number of Ford Common Stock and equivalents outstanding for the
period. Diluted EPS, on the other hand, reflects the maximum potential dilution that could occur if all securities and other
share-based contracts, including stock options, warrants, and rights under our convertible notes were exercised. Potential
dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period.
Convertible Securities
As discussed in Note 19, Trust Preferred Securities with an aggregate liquidation preference of $2.8 billion are
outstanding at December 31, 2010. In the first quarter of 2009, holders of 862,889 Trust Preferred Securities with an
aggregate liquidation preference of $43 million elected to convert such securities into an aggregate 2,437,562 shares of
Ford Common Stock. At the option of the holder, each Trust Preferred Security is convertible, at any time on or before
January 15, 2032, into shares of our Common Stock at a rate of 2.8769 shares for each Trust Preferred Security
(equivalent to a conversion price of $17.38 per share). Conversion of all shares of such Trust Preferred Securities would
result in the issuance of 163 million shares of our Common Stock.
As discussed in Note 19, 2036 Convertible Notes with a principal amount of $25 million and 2016 Convertible Notes
with a principal amount of $883 million are each outstanding at December 31, 2010.
In the fourth quarter of 2010, about $2 billion and $554 million principal amount of the 2016 Convertible Notes and
2036 Convertible Notes, respectively, were exchanged for an aggregate of 274,385,596 shares of Ford Common Stock,
$534 million in cash ($215 in cash per $1,000 principal amount and $190 in cash per $1,000 principal amount of 2016
Convertible Notes and 2036 Convertible Notes exchanged, respectively) and the applicable accrued and unpaid interest
on such 2016 Convertible Notes and 2036 Convertible Notes.
In the second quarter of 2009, $4.3 billion principal amount of 2036 Convertible Notes was exchanged for an
aggregate of 467,909,227 shares of Ford Common Stock, $344 million in cash ($80 in cash per $1,000 principal amount
of 2036 Convertible Notes exchanged) and the applicable accrued and unpaid interest on such 2036 Convertible Notes.
In the fourth quarter of 2008, $67 million principal amount of 2036 Convertible Notes was exchanged for an aggregate
of 7,253,035 shares of Ford Common Stock.
At the option of the holder, each 2036 Convertible Note is convertible at any time on or before December 15, 2036,
into shares of Ford Common Stock at a rate of 108.6957 shares per $1,000 principal amount of Convertible Notes
(equivalent to a conversion price of $9.20 per share). Conversion of all remaining shares of 2036 Convertible Notes
would result in the issuance of about 2.7 million shares of our Common Stock.
At the option of the holder, each 2016 Convertible Note is convertible at any time on or before November 16, 2016,
into shares of Ford Common Stock at a rate of 107.5269 shares per $1,000 principal amount of 2016 Convertible Note
(equivalent to a conversion price of $9.30 per share). Conversion of all remaining shares of 2016 Convertible Notes
would result in the issuance of about 95 million shares of our Common Stock.
Other Transactions Related to Capital Stock
As described in Note 19, during the first half of 2008, we issued an aggregate of 46,437,906 shares of Ford Common
Stock in exchange for $431 million principal amount of our outstanding public unsecured debt securities.
On May 18, 2009, we issued 345,000,000 shares of Ford Common Stock pursuant to a public offering at a price of
$4.75 per share, resulting in total gross proceeds of $1.6 billion.