DIRECTV 2005 Annual Report Download - page 112

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —(continued)
The reconciliation of the amounts used in the basic and diluted EPS computation was as follows:
Income Per Share
(Loss) Shares Amounts
(Dollars and Shares in Millions,
Except Per Share Amounts)
Year Ended December 31, 2005:
Basic EPS
Income from continuing operations before cumulative effect of
accounting changes ................................... $304.6 1,388.4 $0.22
Effect of Dilutive Securities
Dilutive effect of stock options and restricted stock units .......... — 6.4 —
Diluted EPS
Adjusted income from continuing operations before cumulative effect
of accounting changes ................................. $304.6 1,394.8 $0.22
There was no dilutive effect of stock options and restricted stock units for the years ended
December 31, 2004 and 2003, due to the loss we incurred for both of those years.
Note 14: Incentive Plans
Under The DIRECTV Group, Inc. 2004 Stock Plan, or the 2004 Plan, as approved by our
stockholders on June 2, 2004, shares, rights or options to acquire up to 21 million shares of common
stock plus any shares underlying awards cancelled, forfeited or expired from the HEC Plan referred to
below, on a cumulative basis were authorized for grant through March 16, 2014, subject to
Compensation Committee approval.
In connection with the News Corporation transactions, on December 22, 2003, we converted all
91.2 million outstanding GM Class H common stock options and 3.6 million restricted stock units,
issued under the former Hughes Electronics Corporation Incentive Plan, or the HEC Plan, to our
common stock options and restricted stock units on a one-for-one basis with identical terms. Also,
vesting accelerated for 11.5 million stock options because the News Corporation transactions
represented a qualifying change-in-control. The information presented below is based on the GM
Class H common stock options outstanding through December 22, 2003, and our common stock options
and restricted stock units thereafter.
The exercise price of the options granted under the 2004 Plan and the HEC Plan is equal to at
least 100% of the fair market value of the common stock on the date we granted the options. These
nonqualified options generally vest over one to five years, vest immediately in the event of certain
transactions, expire ten years from date of grant and are subject to earlier termination under certain
conditions.
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