PG&E 2008 Annual Report Download - page 114

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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) 2008 2007 2006
Net Income $1,338 $1,006 $ 991
Less: distributed earnings to common shareholders 560 508 460
Undistributed earnings 778 498
531
Less: undistributed earnings from discontinued operations 154 —
—
Undistributed earnings from continuing operations $
624 $ 498 $ 531
Common shareholders’ earnings
Basic
Distributed earnings to common shareholders $ 560 $ 508 $ 460
Undistributed earnings allocated to common shareholders — continuing operations 592 472 503
Undistributed earnings allocated to common shareholders — discontinued operations 146 — —
Total common shareholders’ earnings, basic $1,298 $ 980 $ 963
Diluted
Distributed earnings to common shareholders $ 560 $ 508 $ 460
Undistributed earnings allocated to common shareholders — continuing operations 593 473 504
Undistributed earnings allocated to common shareholders — discontinued operations 146 — —
Total common shareholders’ earnings, diluted $1,299 $ 981 $ 964
Weighted average common shares outstanding, basic 357 351 346
9.50% Convertible Subordinated Notes 19 19 19
Weighted average common shares outstanding and participating securities, basic 376 370 365
Weighted average common shares outstanding, basic 357 351 346
Employee share-based compensation and accelerated share repurchases(1) 1 2 3
Weighted average common shares outstanding, diluted 358 353 349
9.50% Convertible Subordinated Notes 19 19 19
Weighted average common shares outstanding and participating securities, diluted 377 372 368
Net earnings per common share, basic
Distributed earnings, basic(2) $1.57 $1.45 $1.33
Undistributed earnings — continuing operations, basic 1.66 1.34 1.45
Undistributed earnings — discontinued operations, basic 0.41 —
—
Total $3.64 $2.79 $2.78
Net earnings per common share, diluted
Distributed earnings, diluted $1.56 $1.44 $1.32
Undistributed earnings — continuing operations, diluted 1.66 1.34
1.44
Undistributed earnings — discontinued operations, diluted 0.41 —
—
Total $3.63 $2.78 $2.76
(1) Includes approximately one million shares of PG&E Corporation common stock treated as outstanding in connection with accelerated share repurchase
agreements (“ASRs”) for 2006. The remaining shares of approximately two million at December 31, 2006 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.
(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 11,935 and 7,285 shares were excluded from the computation of diluted
EPS for 2008 and 2007, 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.