Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share

Earnings Per Share

Note 3.  Earnings Per Share

Basic earnings per share are calculated under the two-class method, which allocates earnings to each class of stock based upon its dividend rights.  Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1.  See Note 18, “Capital Stock.”  Class A diluted earnings per share are calculated under the if-converted method, which reflects the conversion of Class B shares and the effect of potentially dilutive outstanding employee stock-based awards and awards vested and not yet vested related to the outside directors’ stock compensation plan.  Vested shares related to the outside directors’ compensation plan were included in the table below for the first time in 2010.  The 2009 amounts have been updated to include these shares.  This had no impact on previously reported diluted earnings per share.

A reconciliation of the numerators and denominators used in the basic and diluted per-share computations is presented as follows for each class of Indemnity common stock:

	Indemnity Shareholder Interest
(dollars in millions,				For the years ended December 31,
except per share data)	2011			2010			2009
	Allocated			Allocated			Allocated
	net	Weighted	Per-	net	Weighted	Per-	net	Weighted	Per-
	income	shares	share	income	shares	share	income	shares	share
	(numerator)	(denominator)	amount	(numerator)	(denominator)	amount	(numerator)	(denominator)	amount
Class A – Basic EPS:
Income available to  Class A stockholders	$168	48,875,316	$   3.45	$161	50,705,607	$   3.18	$107	51,250,606	$   2.10
Dilutive effect of stock awards	0	71,721	–	0	68,887	–	0	60,793	–
Assumed conversion of Class B shares	1	6,110,400	–	1	6,110,400	–	1	6,117,600	–
Class A – Diluted EPS:
Income available to Class A stockholders on Class A equivalent shares	$169	55,057,437	$   3.08	$162	56,884,894	$   2.85	$108	57,428,999	$   1.89
Class B – Basic and diluted EPS:
Income available to Class B stockholders	$    1	2,546	$522.47	$   1	2,546	$462.83	$    1	2,549	$312.45