Travelers 2007 Annual Report Download - page 215

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. EARNINGS PER SHARE
Basic EPS was computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding during the period. The computation of diluted EPS
reflected the effect of potentially dilutive securities.
The following is a reconciliation of the income and share data used in the basic and diluted
earnings per share computations:
(for the year ended December 31, in millions, except per share amounts) 2007 2006 2005
Basic
Income from continuing operations, as reported ..................... $4,601 $4,208 $2,061
Preferred stock dividends, net of taxes ............................ (4) (5) (6)
Income from continuing operations available to common shareholders—
basic ................................................. $4,597 $4,203 $2,055
Diluted
Income from continuing operations available to common shareholders ..... $4,597 $4,203 $2,055
Effect of dilutive securities:
Convertible preferred stock .................................. 456
Convertible junior subordinated notes(1) ......................... 826 26
Zero coupon convertible notes ................................ 444
Equity unit stock purchase contracts ............................ ——9
Income from continuing operations available to common shareholders—
diluted .............................................. $4,613 $4,238 $2,100
Common Shares
Basic
Weighted average shares outstanding ............................. 652.7 687.1 676.3
Diluted
Weighted average shares outstanding ............................. 652.7 687.1 676.3
Weighted average effects of dilutive securities:
Stock options and other incentive plans .......................... 9.4 7.1 3.7
Convertible preferred stock .................................. 2.9 3.4 4.2
Convertible junior subordinated notes(1) ......................... 4.9 16.7 16.7
Zero coupon convertible notes ................................ 2.4 2.4 2.4
Equity unit stock purchase contracts ............................ —— 9.5
Total ................................................. 672.3 716.7 712.8
Income from Continuing Operations Per Common Share
Basic .................................................... $ 7.04 $ 6.12 $ 3.04
Diluted ................................................... $ 6.86 $ 5.91 $ 2.95
(1) Redeemed in April 2007. See note 7.
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