Travelers 2008 Annual Report Download - page 230

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. 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) 2008 2007 2006
Basic
Net income, as reported ...................................... $2,924 $4,601 $4,208
Preferred stock dividends, net of taxes ............................ (4) (4) (5)
Net income available to common shareholders—basic .............. $2,920 $4,597 $4,203
Diluted
Net income available to common shareholders ...................... $2,920 $4,597 $4,203
Effect of dilutive securities:
Convertible preferred stock .................................. 445
Zero coupon convertible notes ................................ 444
Convertible junior subordinated notes(1) ......................... —826
Net income available to common shareholders—diluted ............ $2,928 $4,613 $4,238
Common Shares
Basic
Weighted average shares outstanding ............................. 596.4 652.7 687.1
Diluted
Weighted average shares outstanding ............................. 596.4 652.7 687.1
Weighted average effects of dilutive securities:
Stock options and other incentive plans .......................... 6.1 9.4 7.1
Convertible preferred stock .................................. 2.4 2.9 3.4
Zero coupon convertible notes ................................ 2.4 2.4 2.4
Convertible junior subordinated notes(1) ......................... —4.9 16.7
Total ................................................. 607.3 672.3 716.7
Net income Per Common Share
Basic .................................................... $ 4.90 $ 7.04 $ 6.12
Diluted ................................................... $ 4.82 $ 6.86 $ 5.91
(1) Redeemed in April 2007. See note 8.
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