Chevron 2005 Annual Report Download - page 87

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CHEVRON CORPORATION 2005 ANNUAL REPORT 85
NOTE 25.
EARNINGS PER SHARE
Basic earnings per share (EPS) is based upon net income
less preferred stock dividend requirements and includes
the effects of deferrals of salary and other compensation
Year ended December 31
2005 2004 2003
BASIC EPS CALCULATION
Income from continuing operations $ 14,099 $ 13,034 $ 7,382
Add: Dividend equivalents paid on stock units 2 3 2
Add: Affi liated stock transaction recorded to retained earnings1 – – 170
Income from continuing operations available to common stockholders $ 14,101 $ 13,037 $ 7,554
Income from discontinued operations – 294 44
Cumulative effect of changes in accounting principle2 – – (196)
Net income available to common stockholders – Basic $ 14,101 $ 13,331 $ 7,402
Weighted-average number of common shares outstanding3 2,143 2,114 2,123
Add: Deferred awards held as stock units 1 2 2
Total weighted-average number of common shares outstanding 2,144 2,116 2,125
Per-Share of Common Stock
Income from continuing operations available to common stockholders $ 6.58 $ 6.16 $ 3.55
Income from discontinued operations – 0.14 0.02
Cumulative effect of changes in accounting principle – – (0.09)
Net income – Basic $ 6.58 $ 6.30 $ 3.48
DILUTED EPS CALCULATION
Income from continuing operations $ 14,099 $ 13,034 $ 7,382
Add: Dividend equivalents paid on stock units 2 3 2
Add: Affi liated stock transaction recorded to retained earnings1 – – 170
Add: Dilutive effects of employee stock-based awards 2 1 2
Income from continuing operations available to common stockholders $ 14,103 $ 13,038 $ 7,556
Income from discontinued operations – 294 44
Cumulative effect of changes in accounting principle2 – – (196)
Net income available to common stockholders – Diluted $ 14,103 $ 13,332 $ 7,404
Weighted-average number of common shares outstanding3 2,143 2,114 2,123
Add: Deferred awards held as stock units 1 2 2
Add: Dilutive effect of employee stock-based awards 11 6 2
Total weighted-average number of common shares outstanding 2,155 2,122 2,127
Per-Share of Common Stock
Income from continuing operations available to common stockholders $ 6.54 $ 6.14 $ 3.55
Income from discontinued operations – 0.14 0.02
Cumulative effect of changes in accounting principle – – (0.09)
Net income – Diluted $ 6.54 $ 6.28 $ 3.48
1 2003 amount is the company’s share of a capital stock transaction of its Dynegy affi liate, which, under the applicable accounting rules, was recorded directly to retained earnings.
2 Includes a net loss of $200 for the adoption of FAS 143 and a net gain of $4 for the company’s share of Dynegy’s cumulative effect of adoption of EITF 02-3.
3 Share amounts in all periods refl ect a two-for-one stock split effected as a 100 percent stock dividend in September 2004.
awards that are invested in Chevron stock units by certain
offi cers and employees of the company and the company’s
share of stock transactions of affi liates, which, under the
applicable accounting rules, may be recorded directly to the
company’s retained earnings instead of net income. Diluted
EPS includes the effects of these items as well as the dilutive
effects of outstanding stock options awarded under the com-
pany’s stock option programs (see Note 22, “Stock Options
and Other Share-Based Compensation” beginning on page
78). The following table sets forth the computation of basic
and diluted EPS:
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts