Citigroup Inc.

11. EARNINGS PER SHAREThe following is a reconciliation of the income and share data used in the basic and diluted earnings per share (EPS) computations for the years endedDecember 31:In millions, except per-share amounts 2010 2009 2008 (1)Income (loss) before attribution of noncontrolling interests $ 10,951 $ (1,066) $(32,029)Noncontrolling interests from continuing operations 329 95 (343)Net income (loss) from continuing operations (for EPS purposes) $ 10,622 $ (1,161) $(31,686)Income (loss) from discontinued operations, net of taxes (68) (445) 4,002Noncontrolling interest from discontinuing operations (48) — —Citigroup’s net income (loss) $ 10,602 $ (1,606) $(27,684)Impact of the public and private preferred stock exchange offers — (3,242) —Preferred dividends (9) (2,988) (1,695)Impact of the conversion price reset related to the $12.5 billion convertible preferred stock private issuance — (1,285) —Preferred stock Series H discount accretion — (123) (37)Net income (loss) available to common shareholders $ 10,593 $ (9,244) $(29,416)Dividends and undistributed earnings allocated to participating securities (90) (2) (221)Net income (loss) allocated to common shareholders for basic EPS (2) $ 10,503 $ (9,246) $(29,637)Effect of dilutive securities 2 540 877Net income (loss) allocated to common shareholders for diluted EPS (2) $ 10,505 $ (8,706) $(28,760)Weighted-average common shares outstanding applicable to basic EPS 28,776.0 11,568.3 5,265.4Effect of dilutive securitiesConvertible securities 0.7 312.3 503.2Other employee plans 19.8 0.2 —Options 3.7 0.2 0.3TDECs 877.9 218.3 —Adjusted weighted-average common shares outstanding applicable to diluted EPS (3) 29,678.1 12,099.3 5,768.9Basic earnings per shareIncome (loss) from continuing operations $ 0.37 $ (0.76) $ (6.39)Discontinued operations (0.01) (0.04) 0.76Net income (loss) $ 0.36 $ (0.80) $ (5.63)Diluted earnings per share (2)(3)Income (loss) from continuing operations $ 0.35 $ (0.76) $ (6.39)Discontinued operations — (0.04) 0.76Net income (loss) $ 0.35 $ (0.80) $ (5.63)(1) The Company adopted ASC 260-10-45 to 65 (FSP EITF 03-6-1) on January 1, 2009. All prior periods have been restated to conform to the current period’s presentation.(2) Due to the net loss available to common shareholders in 2009 and 2008, loss available to common stockholders for basic EPS was used to calculate diluted EPS. Adding back the effect of dilutive securities wouldresult in anti-dilution.(3) Due to the net loss available to common shareholders in 2009 and 2008, basic shares were used to calculate diluted EPS. Adding dilutive securities to the denominator would result in anti-dilution.During 2010, 2009, and 2008, weighted-average options to purchase386.1 million, 165.6 million and 169.7 million shares of common stock,respectively, were outstanding but not included in the computation ofearnings per common share, because the weighted-average exercise prices of$10.29, $31.57 and $41.92, respectively, were greater than the average marketprice of the Company’s common stock.Warrants issued to the U.S. Treasury as part of the Troubled Asset ReliefProgram (TARP) and the loss-sharing agreement, with exercise prices of$17.85 and $10.61 for approximately 210 million and 255 million sharesof common stock, respectively, were not included in the computationof earnings per common share in 2010 and 2009, because they wereanti-dilutive.Equity awards granted under the Management Committee Long-TermIncentive Plan (MC LTIP) were not included in the 2009 computation ofearnings per common share, because the performance targets under theterms of the awards were not met and, as a result, the awards expired in thefirst quarter of 2010. In addition, the other performance-based equity awardsof approximately 5 million shares were not included in the 2010 and 2009earnings per share calculation, because the performance targets under theterms of the awards were not met.Equity units convertible into approximately 118 million shares and235 million shares of Citigroup common stock held by the Abu DhabiInvestment Authority (ADIA) were not included in the computation ofearnings per common share in 2010 and 2009, respectively, because theexercise price of $31.83 was greater than the average market price of theCompany’s common stock.203