Earnings per Common Share

6 Months Ended

Jun. 30, 2014

Earnings per Common Share

Earnings per Common Share

2.  Earnings per Common Share

Basic earnings per common share is computed using the weighted average number of common shares outstanding, including unvested participating restricted stock units.  Diluted earnings per common share is computed using the weighted average number of common and dilutive potential common shares outstanding.  For the Company, dilutive potential common shares consist of outstanding stock options and unvested non-participating restricted stock units and contingently issuable performance stock awards.

The computation of basic and diluted earnings per common share is presented in the following table.

($ in millions, except per share data)		Three months ended June 30,				Six months ended June 30,
		2014		2013		2014		2013
Numerator:
Net income	$	645	$	434	$	1,245	$	1,143
Less: Preferred stock dividends		31		--		44		--
Net income available to common shareholders		614		434		1,201		1,143
Denominator:
Weighted average common shares outstanding		434.3		468.3		440.4		471.9
Effect of dilutive potential common shares:
Stock options		4.8		3.9		4.6		3.8
Restricted stock units (non-participating) and performance stock awards		1.6		1.6		1.8		1.6
Weighted average common and dilutive potential common shares outstanding		440.7		473.8		446.8		477.3
Earnings per common share - Basic	$	1.41	$	0.93	$	2.73	$	2.42
Earnings per common share - Diluted	$	1.39	$	0.92	$	2.69	$	2.39

The effect of dilutive potential common shares does not include the effect of options with an anti-dilutive effect on earnings per common share because their exercise prices exceed the average market price of Allstate common shares during the period or for which the unrecognized compensation cost would have an anti-dilutive effect.  Options to purchase 4.5 million and 13.5 million Allstate common shares, with exercise prices ranging from $48.46 to $62.42 and $39.95 to $62.42, were outstanding for the three-month periods ended June 30, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share in those periods.  Options to purchase 4.6 million and 13.7 million Allstate common shares, with exercise prices ranging from $45.61 to $62.42 and $39.05 to $62.42, were outstanding for the six-month periods ended June 30, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share in those periods.