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NOTE 6: COMMON STOCK AND SHARE-BASED COMPENSATION (Continued)
which is determined using a Monte Carlo simulation valuation model. Performance share expense is recognized
ratably over the requisite service period based on the fair values determined, except for the expense attributable to
awards granted to retirement-eligible participants, which is recognized on the date of grant. Dividend equivalents on
equity-classified awards, if any, will be paid in cash upon the vesting date based on the amount of common stock
awarded.
The weighted average grant-date fair value for performance shares granted during 2011 and 2010 was $33.91,
and $35.60, respectively. There was no tax benefit associated with performance shares during 2011, 2010, and 2009,
as awards that settle in cash have no tax impact, and awards that settle in shares do not generate a tax benefit until
vested. As of December 31, 2011, $17 million of total unrecognized compensation costs related to nonvested
performance shares are expected to be recognized over the remaining weighted average period of 1.24 years.
The following table summarizes performance shares classified as equity awards activity for 2011:
Number of Weighted Average
Performance Grant-Date
Shares Fair Value
Nonvested at January 1 . . . 609,970 $ 35.60
Granted .............. 774,125 $ 33.91
Vested ............... —
Forfeited ............. (58,689) $ 34.95
Nonvested at December 31 1,325,406 $ 34.64
Prior to 2010, PG&E Corporation awarded performance shares to eligible employees under the 2006 LTIP that
vest at the end of a three-year period and are settled in cash. Upon vesting, the amount of cash that recipients are
entitled to receive, if any, is determined by multiplying the number of vested performance shares by the average
closing price of PG&E Corporation common stock for the last 30 calendar days in the three-year performance
period. This result is then adjusted based on PG&E Corporation’s TSR relative to the performance of a specified
group of peer companies for the applicable three-year performance period. These outstanding performance shares
are classified as a liability because the performance shares can only be settled in cash. During each reporting period
compensation expense recognized for these performance shares will fluctuate based on PG&E Corporation’s
common stock price and its TSR relative to its comparator group. As of December 31, 2011, no amount was accrued
as the performance share liability for PG&E Corporation. As of December 31, 2010, $68 million was accrued as the
performance share liability for PG&E Corporation.
The following table summarizes performance shares classified as liability awards activity for 2011:
Number of Weighted
Performance Average Fair
Shares Value
Nonvested at January 1 ...... 1,137,490 $60.37
Granted ................. —
Vested ................... (516,411) $95.47
Forfeited ................. (22,716) $11.34
Nonvested at December 31 .... 598,363 $ 0.00
For performance shares classified as liability awards, the total intrinsic value of amounts settled during 2011,
2010, and 2009 was $55 million, $17 million, and $21 million, respectively.
NOTE 7: PREFERRED STOCK
PG&E Corporation
PG&E Corporation has authorized 80 million shares of no par value preferred stock and 5 million shares of
$100 par value preferred stock, which may be issued as redeemable or nonredeemable preferred stock. PG&E
Corporation does not have any preferred stock outstanding.
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