Pacific Gas & Electric (PCG+A) 10-Q 2006 Q3 Quarterly report

EXHIBIT 11

PG&E CORPORATION

COMPUTATION OF EARNINGS PER COMMON SHARE

	Three Months Ended				Nine Months Ended
(in millions, except share amounts)	September 30,				September 30,
	2006		2005		2006		2005
Net income	$	393	$	252	$	839	$	737
Less: distributed earnings to common shareholders		115		111		344		334
Undistributed earnings		278		141		495		403
Less: undistributed earnings from discontinued operations		-		13		-		13
Undistributed earnings from continuing operations	$	278	$	128	$	495	$	390
Common shareholders earnings
Basic
Distributed earnings to common shareholders	$	115	$	111	$	344	$	334
Undistributed earnings allocated to common shareholders - continuing operations		264		122		469		371
Undistributed earnings allocated to common shareholders - discontinued operations		-		12		-		12
Total common shareholders earnings, basic	$	379	$	245	$	813	$	717
Diluted
Distributed earnings to common shareholders	$	115	$	111	$	344	$	334
Undistributed earnings allocated to common shareholders - continuing operations		264		122		469		371
Undistributed earnings allocated to common shareholders - discontinued operations		-		12		-		12
Total common shareholders earnings, diluted	$	379	$	245	$	813	$	717
Weighted average common shares outstanding, basic		347		372		345		376
9.50% Convertible Subordinated Notes		19		19		19		19
Weighted average common shares outstanding and participating securities, basic		366		391		364		395
Weighted average common shares outstanding, basic		347		372		345		376
Employee share-based compensation and accelerated share repurchase program (1)		2		4		4		4
Weighted average common shares outstanding, diluted(2)		349		376		349		380
9.50% Convertible Subordinated Notes		19		19		19		19
Weighted average common shares outstanding and participating securities, diluted		368		395		368		399
Net earnings per common share, basic
Distributed earnings, basic	$	0.33	$	0.30	$	1.00	$	0.89
Undistributed earnings - continuing operations, basic		0.76		0.33		1.36		0.99
Undistributed earnings - discontinued operations, basic		-		0.03		-		0.03
Total	$	1.09	$	0.66	$	2.36	$	1.91
Net earnings per common share, diluted
Distributed earnings, diluted	$	0.33	$	0.30	$	0.99	$	0.88
Undistributed earnings - continuing operations, basic		0.76		0.32		1.34		0.98
Undistributed earnings - discontinued operations, basic		-		0.03		-		0.03
Total	$	1.09	$	0.65	$	2.33	$	1.89
(1) Includes approximately one million shares treated as outstanding in connection with the November 2005 ASR for the nine months ended September 30, 2006.  The remaining approximately three million shares relate to share-based compensation and are deemed to be outstanding in accordance with SFAS No. 128 for the purpose of calculating EPS for the nine months ended September 30, 2006.
(2) Options to purchase 23,000 shares of PG&E Corporation common stock were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2005 because the exercise prices of these options were greater than the average market price of PG&E Corporation common stock over these periods. All options to purchase shares of PG&E Corporation common stock were included in the computation of diluted EPS for the three and nine months ended September 30, 2006 because the option exercise prices of these options were lower than the average market price of PG&E Corporation common stock over these periods.