Earnings Per Common Share

9 Months Ended

Sep. 30, 2012

Earnings Per Common Share

2. Earnings Per Common Share

Our basic and diluted earnings per Common Share are calculated as follows:

	Three months ended          September 30,				Nine months ended          September 30,
dollars in millions, except per share amounts	2012		2011		2012		2011
EARNINGS
Income (loss) from continuing operations	$	221	$	235	$	657	$	769
Less: Net income (loss) attributable to noncontrolling interests		2		1		7		12
Income (loss) from continuing operations attributable to Key		219		234		650		757
Less: Dividends on Series A Preferred Stock		5		5		16		17
Cash dividends on Series B Preferred Stock		—		—		—		31
Amortization of discount on Series B Preferred Stock(b)		—		—		—		53
Income (loss) from continuing operations attributable to Key common shareholders		214		229		634		656
Income (loss) from discontinued operations, net of taxes(a)		—		(17)		5		(37)
Net income (loss) attributable to Key common shareholders	$	214	$	212	$	639	$	619
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (000)		936,223		948,702		943,378		926,298
Effect of dilutive convertible preferred stock, common share options and other stock awards (000)		4,541		1,984		4,204		4,151
Weighted-average common shares and potential common shares outstanding (000)		940,764		950,686		947,582		930,449
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.23	$	.24	$	.67	$	.71
Income (loss) from discontinued operations, net of taxes (a)		—		(.02)		.01		(.04)
Net income (loss) attributable to Key common shareholders(c)		.23		.22		.68		.67
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.23	$	.24	$	.67	$	.71
Income (loss) from discontinued operations, net of taxes (a)		—		(.02)		.01		(.04)
Net income (loss) attributable to Key common shareholders — assuming dilution (c)		.23		.22		.67		.67

(a) In April 2009, we decided to wind down the operations of Austin, a subsidiary that specialized in managing hedge fund investments for institutional customers. In September 2009, we decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank. As a result of these decisions, we have accounted for these businesses as discontinued operations. The income from discontinued operations for the nine months ended September 30, 2012, was primarily attributable to fair value adjustments related to the education lending securitization trusts.

(b) Includes a $49 million deemed dividend recorded in the first quarter of 2011 related to the repurchase of the $2.5 billion Series B Preferred Stock.

(c) EPS may not foot due to rounding.