PG&E 2007 Annual Report Download - page 113

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The following is a reconciliation of PG&E Corporation’s net income and weighted average shares of common stock
outstanding for calculating basic and diluted net income per share:
Year ended December 31,
(in millions, except per share amounts) 2007 2006 2005
Net Income $1,006 $ 991 $ 917
Less: distributed earnings to common shareholders 508 460 449
Undistributed earnings 498 531 468
Less: undistributed earnings from discontinued operations — — 13
Undistributed earnings from continuing operations $ 498 $ 531 $ 455
Common shareholders earnings
Basic
Distributed earnings to common shareholders $ 508 $ 460 $ 449
Undistributed earnings allocated to common shareholders — continuing operations 472 503 433
Undistributed earnings allocated to common shareholders — discontinued operations — — 12
Total common shareholders earnings, basic $ 980 $ 963 $ 894
Diluted
Distributed earnings to common shareholders $ 508 $ 460 $ 449
Undistributed earnings allocated to common shareholders — continuing operations 473 504 433
Undistributed earnings allocated to common shareholders — discontinued operations — — 12
Total common shareholders earnings, diluted $ 981 $ 964 $ 894
Weighted average common shares outstanding, basic 351 346 372
9.50% Convertible Subordinated Notes 19 19 19
Weighted average common shares outstanding and participating securities, basic 370 365 391
Weighted average common shares outstanding, basic 351 346 372
Employee share-based compensation and accelerated share repurchases(1) 2 3 6
Weighted average common shares outstanding, diluted 353 349 378
9.50% Convertible Subordinated Notes 19 19 19
Weighted average common shares outstanding and participating securities, diluted 372 368 397
Net earnings per common share, basic
Distributed earnings, basic(2) $1.45 $1.33 $1.21
Undistributed earnings — continuing operations, basic 1.34 1.45 1.16
Undistributed earnings — discontinued operations, basic — — 0.03
Total $2.79 $2.78 $2.40
Net earnings per common share, diluted
Distributed earnings, diluted $1.44 $1.32 $1.19
Undistributed earnings — continuing operations, diluted 1.34 1.44 1.15
Undistributed earnings — discontinued operations, diluted — — 0.03
Total $2.78 $2.76 $2.37
(1) Includes approximately one million and two million shares of PG&E Corporation common stock treated as outstanding in connection with accelerated
share repurchase agreements for 2006 and 2005, respectively. The remaining shares of approximately two million at December 31, 2006 and four million
at December 31, 2005 relate to share-based compensation and are deemed to be outstanding under SFAS No. 128 for the purpose of calculating EPS.
PG&E Corporation has no remaining obligation under these ASRs as of December 31, 2007. See the section of Note 2 entitled “Earnings Per Share.”
(2) “Distributed earnings, basic” differs from actual per share amounts paid as dividends, as the EPS computation under GAAP requires the use of the
weighted average, rather than the actual number, of shares outstanding.
PG&E Corporation stock options to purchase 7,285 and 28,500 shares were excluded from the computation of diluted
EPS for 2007 and 2005, respectively, because the exercise prices of these options were greater than the average market price
of PG&E Corporation common stock during these years. All PG&E Corporation stock options were included in the
computation of diluted EPS for 2006 because the exercise price of these stock options was lower than the average market
price of PG&E Corporation common stock during the year.
PG&E Corporation refl ects the preferred dividends of subsidiaries as other expense for computation of both basic and
diluted EPS.