Occidental Petroleum 2008 Annual Report Download - page 71

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EARNINGS PER SHARE
Basic EPS was computed by dividing net income by the weighted-average number of common shares outstanding during each year,
net of treasury shares and including vested but unissued shares and share units. The computation of diluted EPS further reflects the dilutive
effect of stock options and unvested stock-settled SARs and RSUs.
The following are the share amounts used to compute the basic and diluted EPS for the years ended December 31:
In millions 2008 2007 2006
Basic Earnings per Share
Weighted-average common shares outstanding 879.8 874.0 860.9
Weighted-average treasury shares (62.9)(42.1)(15.9)
Vested, unissued shares 0.7 3.0 7.6
Basic Shares 817.6 834.9 852.6
Diluted Earnings per Share
Basic shares 817.6 834.9 852.6
Dilutive effect of stock options and unvested restricted shares 3.2 4.2 7.8
Dilutive Shares 820.8 839.1 860.4
ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive loss consisted of the following after-tax losses:
Balance at December 31, (in millions) 2008 2007
Foreign currency translation adjustments $(34)$(10)
Unrealized losses on derivatives (150) (441)
Pension and post-retirement adjustments (a) (365) (181)
Unrealized losses on securities (3) —
Total $(552)$(632)
(a) See Note 13 for further information.
NOTE 12 STOCK-BASED INCENTIVE PLANS
Occidental has established several Plans that allow it to issue stock-based awards in the form of Options, RSUs, stock bonuses,
SARs, PSAs, PRSUs, TSRIs, CSSUs and dividend equivalents. These include the 1995 Incentive Stock Plan (1995 ISP), 2001 Incentive
Compensation Plan (2001 ICP), Phantom Share Unit Awards Plan and the 2005 Long-Term Incentive Plan (2005 LTIP). No further awards
will be granted under the 1995 ISP and 2001 ICP; however, certain 1995 ISP and 2001 ICP award grants were outstanding at December 31,
2008. An aggregate of 66 million shares of Occidental common stock are reserved for issuance under the 2005 LTIP and at December 31,
2008, approximately 44.1 million shares of Occidental common stock were available for future awards. All non-employee director awards are
now granted under the 2005 LTIP. During 2008, non-employee directors were granted awards for 59,800 shares of restricted stock that fully
vested on the grant date. Awards that have been granted to directors under the 2005 LTIP are restricted and may not be sold or transferred for
three years, except in the case of death or disability, during the director’s period of service as a member of the Board. Compensation expense
for these awards was measured using the quoted market price of Occidental's common stock on the grant date and was recognized at the
grant date.
The table below summarizes certain stock-based incentive amounts for the past three years:
For the years ended December 31, (in millions) 2008 2007 2006
Compensation expense $139 $290 $211
Income tax benefit recognized in the income statement $51 $105 $77
Intrinsic value of options and stock-settled SAR exercises $291 $110 $494
Cash paid (a) $177 $95 $34
Fair value of RSUs and PSAs vested during the year (b) $112 $128 $107
(a) Includes cash paid under the cash-settled SARs and the cash-settled portion of the PSAs and CSSUs.
(b) As measured on the vesting date for RSUs and the stock-settled portion of the PSAs.
As of December 31, 2008, there was $122 million of pre-tax unrecognized compensation expense related to all unvested stock-based
incentive award grants. This expense is expected to be recognized over a weighted-average period of 1.9 years.
57
STOCK OPTIONS AND SARs