Xerox 2007 Annual Report Download - page 133

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
Note 18 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share of common stock for the
three years ended December 31 (in millions, except shares in thousands):
2007 2006 2005
Basic Earnings per Share:
Income from continuing operations before discontinued operations and
cumulative effect of change in accounting principle ..................... $ 1,135 $ 1,210 $ 933
Accrued dividends on Series C Mandatory Convertible Preferred Stock ....... – (29) (58)
Adjusted income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle ................. 1,135 1,181 875
Income from discontinued operations, net ............................... – – 53
Cumulative effect of change in accounting principle, net ................... – – (8)
Adjusted net income available to common shareholders ................... $ 1,135 $ 1,181 $ 920
Weighted Average Common Shares Outstanding ......................... 934,903 943,852 957,149
Basic Earnings per Share:
Earnings from continuing operations .................................... $ 1.21 $ 1.25 $ 0.91
Earnings from discontinued operations .................................. – – 0.06
Loss from cumulative effect of change in accounting principle ............. – – (0.01)
Basic Earnings per Share .......................................... $ 1.21 $ 1.25 $ 0.96
Diluted Earnings per Share:
Income from continuing operations before discontinued operations and
cumulative effect of change in accounting principle ..................... $ 1,135 $ 1,210 $ 933
Interest on Convertible securities, net .................................... 1 1 1
Adjusted income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle ................. 1,136 1,211 934
Income from discontinued operations, net ............................... – – 53
Cumulative effect of change in accounting principle, net ................... – – (8)
Adjusted net income available to common shareholders ................... $ 1,136 $ 1,211 $ 979
Weighted Average Common Shares Outstanding ......................... 934,903 943,852 957,149
Common shares issuable with respect to:
Stock options ..................................................... 8,650 9,300 10,470
Restricted stock and performance shares ............................ 7,396 3,980 945
Series C Mandatory Convertible Preferred Stock ...................... – 37,398 74,797
Convertible securities .............................................. 1,992 1,992 1,992
Adjusted Weighted Average Shares Outstanding .......................... 952,941 996,522 1,045,353
Diluted Earnings per Share:
Earnings from continuing operations .................................... $ 1.19 $ 1.22 $ 0.90
Earnings from discontinued operations .................................. – – 0.05
Loss from cumulative effect of change in accounting principle ............. – – (0.01)
Diluted Earnings per Share ........................................ $ 1.19 $ 1.22 $ 0.94
The 2007, 2006 and 2005 computation of diluted earnings per share did not include the effects of 23 million,
27 million and 36 million stock options, respectively, because their respective exercise prices were greater than the
corresponding market value per share of our common stock.
Xerox Annual Report 2007 131