Indemnity Earnings Per Share

9 Months Ended

Sep. 30, 2012

Indemnity Earnings Per Share

Indemnity Earnings Per Share

Note 3.  Indemnity Earnings Per Share

Basic earnings per share are calculated under the two-class method, which allocates earnings to each class of stock based on its dividend rights.  Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1.  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 any potentially dilutive outstanding vested and not yet vested awards related to our outside directors’ stock compensation plan and any employee stock based awards.  In the first quarter of 2012, two shares of Class B common stock were converted into 4,800 shares of Class A common stock.  See Note 15. “Indemnity Capital Stock”.

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,	Three months ended September 30,
except per share data)	2012			2011
	Allocated	Weighted	Per-	Allocated	Weighted	Per-
	net income	shares	share	net income	shares	share
	(numerator)	(denominator)	amount	(numerator)	(denominator)	amount
Class A – Basic EPS:
Income available to Class A stockholders	$51	47,188,741	$    1.08	$47	48,503,383	$    0.97
Dilutive effect of stock-based awards	0	80,505	–	0	71,238	–
Assumed conversion of Class B shares	0	6,105,600	–	0	6,110,400	–
Class A – Diluted EPS:
Income available to Class A stockholders on Class A equivalent shares	$51	53,374,846	$    0.96	$47	54,685,021	$    0.87
Class B – Basic and diluted EPS:
Income available to Class B stockholders	$  0	2,544	$162.02	$  0	2,546	$146.67

	Indemnity Shareholder Interest
(dollars in millions,	Nine months ended September 30,
except per share data)	2012			2011
	Allocated	Weighted	Per-	Allocated	Weighted	Per-
	net income	shares	share	net income	shares	share
	(numerator)	(denominator)	amount	(numerator)	(denominator)	amount
Class A – Basic EPS:
Income available to Class A stockholders	$129	47,476,693	$    2.73	$142	49,176,124	$    2.90
Dilutive effect of stock-based awards	0	80,505	–	0	71,238	–
Assumed conversion of Class B shares	1	6,105,600	–	1	6,110,400	–
Class A – Diluted EPS:
Income available to Class A stockholders
on Class A equivalent shares	$130	53,662,798	$     2.43	$143	55,357,762	$    2.59
Class B – Basic and diluted EPS:
Income available to Class B stockholders	$    1	2,544	$410.89	$    1	2,546	$439.39