CAPITAL STOCK AND EARNINGS PER SHARE

We present both basic and diluted earnings per share (“EPS”) amounts in our financial reporting. Basic EPS excludes dilution and is computed by dividing income available to Common and Class B Stock holders by the weighted-average number of Common and Class B Stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from our share-based compensation, including “in-the-money” stock options and unvested restricted stock units (“RSUs”). Potential dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period.

Earnings Per Share Attributable to Ford Motor Company Common and Class B Stock

Basic and diluted income per share were calculated using the following (in millions):



	First Quarter
	2015		2014
Basic and Diluted Income Attributable to Ford Motor Company
Basic income	$	924	$	989
Effect of dilutive 2016 Convertible Notes (a) (b)	—		12
Diluted income	$	924	$	1,001

Basic and Diluted Shares
Basic shares (average shares outstanding)	3,963		3,946
Net dilutive options and unvested RSUs	38		48
Dilutive 2016 Convertible Notes (b)	—		100
Diluted shares	4,001		4,094

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(a)	As applicable, includes interest expense, amortization of discount, amortization of fees, and other changes in income or loss that would result from the assumed conversion.


(b)	In October 2014, we elected to terminate the conversion rights of holders under the 2016 Convertible Notes in accordance with their terms effective as of the close of business on November 20, 2014. On November 21, 2014, we redeemed for cash the remaining outstanding 2016 Convertible Notes.