EXHIBIT 11
PG&E CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
Year Ended December 31, | ||||||||||
2005 | 2004 | 2003 | ||||||||
(in millions, except per share amounts) | ||||||||||
Net Income | $ | 917 | $ | 4,504 | $ | 420 | ||||
Less: distributed earnings to common shareholders | 449 | - | - | |||||||
Undistributed earnings | 468 | 4,504 | 420 | |||||||
Less: undistributed earnings (loss) from discontinued operations | 13 | 684 | (365 | ) | ||||||
Undistributed earnings before cumulative effect of changes in accounting principles | 455 | 3,820 | 785 | |||||||
Less: undistributed loss from cumulative effect of changes in accounting principles | - | - | (6 | ) | ||||||
Undistributed earnings from continuing operations | $ | 455 | $ | 3,820 | $ | 791 | ||||
Common shareholder earnings | ||||||||||
Basic | ||||||||||
Distributed earnings to common shareholders | $ | 449 | $ | - | $ | - | ||||
Undistributed earnings allocated to common shareholders - continuing operations | 433 | 3,646 | 754 | |||||||
Undistributed earnings (loss) allocated to common shareholders - discontinued operations | 12 | 653 | (348 | ) | ||||||
Undistributed earnings (loss) allocated to common shareholders - cumulative effect in change in accounting principles | - | - | (6 | ) | ||||||
Total common shareholders earnings, basic | $ | 894 | $ | 4,299 | $ | 400 | ||||
Diluted | ||||||||||
Distributed earnings to common shareholders | $ | 449 | $ | - | $ | - | ||||
Undistributed earnings allocated to common shareholders - continuing operations | 433 | 3,650 | 755 | |||||||
Undistributed earnings (loss) allocated to common shareholders - discontinued operations | 12 | 653 | (348 | ) | ||||||
Undistributed earnings (loss) allocated to common shareholders - cumulative effect of changes in accounting principles | - | - | (6 | ) | ||||||
Total common shareholders earnings, diluted | $ | 894 | $ | 4,303 | $ | 401 | ||||
Weighted average common shares outstanding, basic | 372 | 398 | 385 | |||||||
9.50% Convertible Subordinated Notes | 19 | 19 | 9 | |||||||
Weighted average common shares outstanding and participating securities, basic | 391 | 417 | 404 | |||||||
Weighted average common shares outstanding, basic | 372 | 398 | 385 | |||||||
Employee stock-based compensation and accelerated share repurchase program (1) | 6 | 7 | 4 | |||||||
PG&E Corporation Warrants | - | 2 | 5 | |||||||
Weighted average common shares outstanding, diluted | 378 | 407 | 394 | |||||||
9.50% Convertible Subordinated Notes | 19 | 19 | 19 | |||||||
Weighted average common shares outstanding and participating securities, diluted | 397 | 426 | 413 | |||||||
Net earnings per common share, basic | ||||||||||
Distributed earnings, basic (2) | $ | 1.21 | $ | - | $ | - | ||||
Undistributed earnings - continuing operations, basic | 1.16 | 9.16 | 1.96 | |||||||
Undistributed earnings (loss) - discontinued operations, basic | 0.03 | 1.64 | (0.90 | ) | ||||||
Undistributed earnings (loss) - cumulative effect of changes in accounting principles | - | - | (0.01 | ) | ||||||
Rounding | - | - | (0.01 | ) | ||||||
Total | $ | 2.40 | $ | 10.80 | $ | 1.04 | ||||
Net earnings per common share, diluted | ||||||||||
Distributed earnings, diluted | $ | 1.19 | $ | - | $ | - | ||||
Undistributed earnings - continuing operations, diluted | 1.15 | 8.97 | 1.92 | |||||||
Undistributed earnings (loss) - discontinued operations, diluted | 0.03 | 1.60 | (0.88 | ) | ||||||
Undistributed earnings (loss) - cumulative effect of changes in accounting principles | - | - | (0.01 | ) | ||||||
Rounding | - | - | (0.01 | ) | ||||||
Total | $ | 2.37 | $ | 10.57 | $ | 1.02 |
(1) Includes approximately 2 million shares and 222,000 shares, respectively, of PG&E Corporation common stock potentially issuable in settlement of an obligation of PG&E Corporation of approximately $71million and $7.4 million, respectively, under an accelerated share repurchase agreement at December 31, 2005 and December 31, 2004, respectively. The remaining shares, approximately 4 million at December 31, 2005 and 6.8 million shares at December 31, 2004, are deemed to be outstanding per SFAS No. 128 for the purpose of calculating earnings per share.
(2) Distributed earnings, basic differs from actual per share amounts paid as dividends as the earnings per share computation under GAAP requires that we use the weighted average, rather than the actual number of shares outstanding.