KeyBank 2008 Annual Report Download - page 88

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS KEYCORP AND SUBSIDIARIES
Key’s basic and diluted earnings per common share are calculated as follows:
Year ended December 31,
dollars in millions, except per share amounts 2008 2007 2006
EARNINGS
(Loss) income from continuing operations before cumulative effect
of accounting change $(1,468) $941 $1,193
Loss from discontinued operations, net of taxes —(22) (143)
(Loss) income before cumulative effect of accounting change (1,468) 919 1,050
Cumulative effect of accounting change, net of taxes ——5
Net (loss) income (1,468) 919 1,055
Less: Cash dividends on Series A Preferred Stock 25 ——
Cash dividends on Series B Preferred Stock 15 ——
Amortization of discount on Series B Preferred Stock 2——
Net (loss) income applicable to common shares $(1,510) $919 $1,055
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (000) 450,039 392,013 404,490
Effect of dilutive convertible preferred stock, common stock options
and other stock awards (000) 25,987 3,810 5,732
Weighted-average common shares and potential
common shares outstanding (000) 476,026 395,823 410,222
EARNINGS PER COMMON SHARE
Income from continuing operations before cumulative
effect of accounting change $(3.36) $2.40 $2.95
Loss from discontinued operations —(.06) (.35)
(Loss) income beforecumulative effect of accounting change (3.36) 2.35 2.60
Net (loss) income (3.36) 2.35 2.61
(Loss) income from continuing operations before cumulative effect
of accounting change — assuming dilution $(3.36) $2.38 $2.91
Loss from discontinued operations — assuming dilution —(.05) (.35)
(Loss) income beforecumulative effect of accounting change —
assuming dilution (3.36) 2.32 2.56
Net (loss) income — assuming dilution (3.36) 2.32 2.57
2. EARNINGS PER COMMON SHARE
During the years ended December 31, 2008, 2007 and 2006, certain
weighted-average options to purchase common shares were outstanding
but not included in the calculation of “net income per common share —
assuming dilution” during any quarter in which their exercise prices were
greater than the average market price of the common shares because
including the options in the calculations would have been antidilutive. The
calculations for the full years shown in the following table weremade by
averaging the results of the four quarterly calculations for each year.
Year ended December 31, 2008 2007 2006
Weighted-average options excluded from the calculation
of net income per common share — assuming dilution 29,702,427 10,953,063 384,907
Exercise prices for weighted-average options excluded $10.88 to $50.00 $27.08 to $50.00 $36.22 to $50.00
In addition, during the years ended December 31, 2008, 2007 and
2006, weighted-average contingently issuable performance-based awards
for 1,177,881, 1,616,054 and 1,700,305 common shares, respectively,
were outstanding, but not included in the calculation of “net (loss)
income per common share — assuming dilution.” These awards vest only
if Key achieves certain cumulative three-year financial performance
targets and werenot included in the calculation because the time period
for the measurement had not yet expired.