APS 2011 Annual Report Download - page 161

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
136
15. Earnings Per Share
The following table presents earnings per weighted-average common share outstanding for
the years ended December 31, 2011, 2010 and 2009:
2011 2010 2009
Basic earnings per share:
Income from continuing operations
attributable to common shareholders $ 3.01 $ 3.05 $ 2.34
Income (loss) from discontinued
operations 0.10 0.23 (1.66)
Earnings per share – basic $ 3.11 $ 3.28 $ 0.68
Diluted earnings per share:
Income from continuing operations
attributable to common shareholders $ 2.99 $ 3.03 $ 2.34
Income (loss) from discontinued
operations 0.10 0.24 (1.67)
Earnings per share – diluted $ 3.09 $ 3.27 $ 0.67
Dilutive stock options and performance shares (which are contingently issuable) increased
average common shares outstanding by approximately 811,000 shares in 2011, 565,000 shares in
2010 and 103,000 shares in 2009. Total average common shares outstanding for the purposes of
calculating diluted earnings per share were 109,864,243 shares in 2011, 107,137,785 shares in 2010
and 101,263,795 shares in 2009.
For the year ended 2011, there were no common stock options that were excluded from the
computation of diluted earnings per share as a result of the options’ exercise prices being greater than
the average market price of the common shares. Options to purchase shares of common stock that
were not included in the computation of diluted earnings per share were 192,542 during 2010 and
572,301 during 2009.
16. Stock-Based Compensation
Pinnacle West grants long-term incentive awards under the 2007 long-term incentive plan
(“2007 Plan”) in the form of Stock Grants, Restricted Stock Units, Restricted Stock and Performance
Shares and may grant incentive and stock options, stock appreciation rights, dividend equivalents and
stock. The 2007 Plan, effective May 23, 2007, provides a maximum of 8 million common shares to
be available for grant to eligible employees and members of the Board of Directors.
Restricted Stock Unit Awards and Stock Grants
Stock grants issued to non-officer members of the Board of Directors in 2009 under the 2007
Plan were paid in fully transferable shares of stock. The 2011 and 2010 grants issued under the 2007
Plan provided Directors the option to elect to receive a stock grant, or to defer receipt until a later
date and receive restricted stock units in lieu of the stock grant. Directors who elect to defer may
elect to receive payment in either (1) stock, or (2) 50% in cash and 50% in stock. The Director may
elect to receive payments either (1) as of the last business day of the month following the month in
which the Director separates from services on the Board, or (2) as of a date specified by the Director,