PG&E 2011 Annual Report Download - page 84

NOTE 8: EARNINGS PER SHARE (Continued)
The following is a reconciliation of PG&E Corporation’s income available for common shareholders and
weighted average common shares outstanding for calculating basic EPS:
Year Ended
December 31,
2011 2010 2009
(in millions, except per share amounts)
Basic
Income available for common shareholders ................................... $844 $1,099 $1,220
Less: distributed earnings to common shareholders .............................. — 706 621
Undistributed earnings .................................................. $ 844 $ 393 $ 599
Allocation of undistributed earnings to common shareholders
Distributed earnings to common shareholders .................................. $ — $ 706 $ 621
Undistributed earnings allocated to common shareholders ......................... — 385 573
Total common shareholders earnings ........................................ $ — $1,091 $1,194
Weighted average common shares outstanding, basic ............................ 401 382 368
Convertible subordinated notes ............................................ —817
Weighted average common shares outstanding and participating securities ............ 401 390 385
Net earnings per common share, basic
Distributed earnings, basic(1) .............................................. $ — $ 1.85 $ 1.69
Undistributed earnings .................................................. — 1.01 1.56
Total ............................................................... $2.10 $ 2.86 $ 3.25
(1) Distributed earnings, basic may differ 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.
In calculating diluted EPS during the periods in which PG&E Corporation’s convertible subordinated notes were
outstanding, PG&E Corporation applied the ‘‘if-converted’’ method to reflect the dilutive effect of the convertible
subordinated notes to the extent that the impact was dilutive when compared to basic EPS. In addition, PG&E
Corporation applied the treasury stock method of reflecting the dilutive effect of outstanding share-based
compensation in the calculation of diluted EPS.
The following is a reconciliation of PG&E Corporation’s income available for common shareholders and
weighted average common shares outstanding for calculating diluted EPS:
Year Ended
December 31,
2011 2010 2009
(in millions, except per share amounts)
Diluted
Income available for common shareholders ................................... $844 $1,099 $1,220
Add earnings impact of assumed conversion of participating securities:
Interest expense on convertible subordinated notes, net of tax .................... —815
Unrealized loss on embedded derivative, net of tax ............................ —— 2
Income available for common shareholders and assumed conversion ................. $ 844 $1,107 $1,237
Weighted average common shares outstanding, basic ............................ 401 382 368
Add incremental shares from assumed conversions:
Convertible subordinated notes .......................................... —817
Employee share-based compensation ...................................... 1 2 1
Weighted average common shares outstanding, diluted ........................... 402 392 386
Total earnings per common share, diluted .................................... $2.10 $ 2.82 $ 3.20
For each of the periods presented above, the calculation of outstanding common shares on a diluted basis
excluded an insignificant amount of options and securities that were antidilutive.
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