The components of earnings per share were:


Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2012			2011			2010
Net income attributable to U.S. Bancorp	$	5,647		$	4,872		$	3,317
Preferred dividends		(238	)		(129	)		(89	)
Equity portion of gain on ITS exchange transaction, net of tax (a)		–			–			118
Earnings allocated to participating stock awards		(26	)		(22	)		(14	)
Net income applicable to U.S. Bancorp common shareholders	$	5,383		$	4,721		$	3,332
Average common shares outstanding		1,887			1,914			1,912
Net effect of the exercise and assumed purchase of stock awards and conversion of outstanding convertible notes		9			9			9
Average diluted common shares outstanding		1,896			1,923			1,921
Earnings per common share	$	2.85		$	2.47		$	1.74
Diluted earnings per common share	$	2.84		$	2.46		$	1.73

(a)

During 2010, the Company exchanged depositary shares representing an ownership interest in 5,746 shares of Series A Preferred Stock for approximately 46 percent of the outstanding ITS issued by USB Capital IX to third party investors, retired a pro-rata portion of the related junior subordinated debentures and cancelled a pro-rata portion of the related stock purchase contracts.