Earnings Per Share

3 Months Ended

Mar. 31, 2012

EARNINGS PER SHARE

17. EARNINGS PER SHARE

Basic and diluted earnings per share are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive restricted stock units, stock options and convertible securities. The effect of such potential common stock is computed using the treasury stock method or the if-converted method, as applicable.

 The following tables present a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income from continuing operations for the three months ended March 31, 2012 and 2011. In the table below, income represents the numerator and weighted-average shares represent the denominator:

			2012					2011
			Income		Shares	$ per Share		Income		Shares	$ per Share
			(in millions except per share data)
BASIC EARNINGS PER SHARE
	Income from continuing operations attributable
		to The AES Corporation common stockholders	$	345	766	$	0.45	$	237	787	$	0.30
EFFECT OF DILUTIVE SECURITIES
	Convertible securities			6	15		-		-	-		-
	Stock options			-	1		-		-	2		-
	Restricted stock units			-	3		(0.01)		-	3		-
DILUTED EARNINGS PER SHARE			$	351	785	$	0.44	$	237	792	$	0.30

The calculation of diluted earnings per share excluded 6,599,286 and 16,253,344 options outstanding at March 31, 2012, and 2011, respectively, that could potentially dilute basic earnings per share in the future. Those options were not included in the computation of diluted earnings per share because the exercise price of those options exceeded the average market price during the related period. For the three months ended March 31, 2012, all convertible debentures were included in the earnings per share calculation. For the three months ended March 312011, all convertible debentures were omitted from the earnings per share calculation because they were anti-dilutive. In arriving at income attributable to AES Corporation common stockholders in computing basic earnings per share, dividends on preferred stock of our subsidiaries were deducted.