NEW YORK (CNN/Money) - U.S. companies have been a whole lot less profitable than they say they are, according to Standard & Poor's.

In a report released Thursday, Standard & Poor's said that "core earnings", which include expenses related to granting employee options and pension plan losses, came in at $18.48 a share for the benchmark S&P 500 index in the 12 months ended June 2002. As reported, earnings for the same period (earnings according to generally accepted accounting practices) were $26.74. Earnings as reported by Thomson Financial/First Call -- the ones that companies would prefer investors use -- were $44.93 for the same period.

Following core earnings, the S&P appears much more expensive: Its price-to-earnings ratio on the core basis is 48.5 as compared with 19.9 on the pro-forma First Call basis.

S&P 500 core earnings took a hit of $5.21 from options. Most companies don't treat employee options as an expense as they do with other forms of compensation. Standard & Poor's, and many accounting experts, think they should. The Financial Accounting Standards Board, which oversees accounting issues in the U.S., recently proposed that companies show in the notes to their financial statements, on a quarterly basis, what effect options would have on their earnings. This is seen as a first step toward an eventual ruling that options be expensed.

Nearly half of the options hit to S&P 500 core earnings -- $2.52 -- was concentrated in the tech sector.

The hit from companies' pension plans came to $6.54. With the sharp drop in the stock market, many companies' pension plans have foundered and some are severely underfunded.