SEMPRA ENERGY – SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE

The following table provides EPS computations for the years ended December 31, 2017, 2016 and 2015. Basic EPS is calculated by dividing earnings attributable to common stock by the weighted-average number of common shares outstanding for the year. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.



EARNINGS PER SHARE COMPUTATIONS AND DIVIDENDS DECLARED
(Dollars in millions, except per share amounts; shares in thousands)
	Years ended December 31,
	2017		2016		2015
Numerator:
Earnings/Income attributable to common shares	$	256	$	1,370	$	1,349

Denominator:
Weighted-average common shares outstanding for basic EPS⁽¹⁾	251,545		250,217		248,249
Dilutive effect of stock options, RSAs and RSUs⁽²⁾	755		938		2,674
Weighted-average common shares outstanding for diluted EPS	252,300		251,155		250,923

EPS:
Basic	$	1.02	$	5.48	$	5.43
Diluted	$	1.01	$	5.46	$	5.37

Dividends declared per share of common stock⁽³⁾	$	3.29	$	3.02	$	2.80


⁽¹⁾	Includes average fully vested RSUs held in our Deferred Compensation Plan of 609 in 2017, 568 in 2016 and 491 in 2015. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.


⁽²⁾	Due to market fluctuations of both Sempra Energy stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 8, dilutive RSUs may vary widely from period-to-period.


⁽³⁾	Our board of directors has the discretion to determine the payment and amount of future dividends.

The potentially dilutive impact from stock options, RSAs and RSUs is calculated under the treasury stock method. Under this method, proceeds based on the exercise price and unearned compensation are assumed to be used to repurchase shares on the open market at the average market price for the period, reducing the number of potential new shares to be issued and sometimes causing an antidilutive effect. The computation of diluted EPS excludes 237,741, zero and 722 potentially dilutive shares for the years ended December 31, 2017, 2016 and 2015, respectively, because to include them would be antidilutive for the period. However, these shares could potentially dilute basic EPS in the future.

We are authorized to issue 750 million shares of no par value common stock. The following table provides common stock activity for the years ended December 31, 2017, 2016 and 2015.



COMMON STOCK ACTIVITY

	Years ended December 31,
	2017		2016		2015
Common shares outstanding, January 1	250,152,514		248,298,080		246,330,884
RSUs vesting⁽¹⁾	362,022		1,363,555		1,499,062
Stock options exercised	164,454		167,742		227,815
Savings plan issuance	567,428		653,607		652,631
Common stock investment plan⁽²⁾	254,047		266,056		249,665
Issuance of RSUs held in our Deferred Compensation Plan	7,811		—		—
Shares repurchased⁽³⁾	(149,299	)	(596,526	)	(661,977	)
Common shares outstanding, December 31	251,358,977		250,152,514		248,298,080


⁽¹⁾	Includes dividend equivalents.


⁽²⁾	Participants in the Direct Stock Purchase Plan may reinvest dividends to purchase newly issued shares.


⁽³⁾	From time to time, we purchase shares of our common stock or units from long-term incentive plan participants who elect to sell to us a sufficient number of vested RSAs or RSUs to meet minimum statutory tax withholding requirements.

On January 9, 2018, we completed the offering of 23,364,486 shares of our common stock in a registered public offering, pursuant to forward sale agreements. In connection with the overallotment option granted to the underwriters, on January 9, 2018, we issued 3,504,672 shares of our common stock and received net proceeds of $368 million (net of underwriting discounts, but before deducting other related expenses) for such shares, which we discuss in Note 18.