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Earnings Per Share
3 Months Ended
Jun. 30, 2012
EARNINGS PER SHARE

18. 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 and six months ended June 30, 2012 and 2011. In the table below, income represents the numerator and weighted-average shares represent the denominator:

    Three Months Ended June 30,
    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 $ 69  764 $ 0.09 $191  782 $ 0.24
EFFECT OF DILUTIVE SECURITIES                
 Stock options   -  1   -   -  2   -
 Restricted stock units   -  3   -   -  3   -
DILUTED EARNINGS PER SHARE $ 69  768 $ 0.09 $ 191  787 $ 0.24

    Six Months Ended June 30,
    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 $ 414  765 $ 0.54 $ 428  785 $ 0.54
EFFECT OF DILUTIVE SECURITIES                
 Stock options   -  1   -   -  2   -
 Restricted stock units   -  3   -   -  3   (0.01)
DILUTED EARNINGS PER SHARE $ 414  769 $ 0.54 $ 428  790 $ 0.53

The calculation of diluted earnings per share excluded 6,685,692 and 15,930,917 options outstanding at June 30, 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.

The calculation of diluted earnings per share excluded 2,444,811 restricted stock units outstanding at June 30, 2012, that could potentially dilute basic earnings per share in the future. Those restricted stock units were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for June 30, 2012.

For the three and six months ended June 30, 2012 and 2011, all convertible debentures were omitted from the earnings per share calculation because they were anti-dilutive. During the three months ended June 30, 2012, 743,524 shares of common stock were issued upon the exercise of stock options. During the six months ended June 30, 2012, 1,013,872 shares of common stock were issued under the Company's profit sharing plan and 1,044,017 shares of common stock were issued upon the exercise of stock options.