EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

NOTE 11. EARNINGS PER SHARE

Basic earnings per share is determined by dividing net earnings attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted earnings per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.

The components of our earnings per share are as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011		2010
	(in thousands, except per share amounts)
Basic EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	44,168	$	(1,511	)	$	62,113	$	(21,404	)
Income from discontinued operations, net of tax		0		8,283			0		18,360

Income (loss) attributable to Key	$	44,168	$	6,772		$	62,113	$	(3,044	)

Denominator
Weighted average shares outstanding		147,722		125,637			144,274		125,336
Basic earnings (loss) per share from continuing operations attributable to Key	$	0.30	$	(0.01	)	$	0.43	$	(0.17	)
Basic earnings per share from discontinued operations		0		0.06			0		0.15

Basic earnings (loss) per share attributable to Key	$	0.30	$	0.05		$	0.43	$	(0.02	)

Diluted EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	44,168	$	(1,511	)	$	62,113	$	(21,404	)
Income from discontinued operations, net of tax		0		8,283			0		18,360

Income (loss) attributable to Key	$	44,168	$	6,772		$	62,113	$	(3,044	)

Denominator
Weighted average shares outstanding		147,722		125,637			144,274		125,336
Stock options		298		0			330		0
Warrants		0		0			46		0
Stock appreciation rights		68		0			63		0

Total		148,088		125,637			144,713		125,336
Diluted earnings (loss) per share from continuing operations attributable to Key	$	0.30	$	(0.01	)	$	0.43	$	(0.17	)
Diluted earnings per share from discontinued operations		0		0.06			0		0.15

Diluted earnings (loss) per share attributable to Key	$	0.30	$	0.05		$	0.43	$	(0.02	)

The diluted earnings per share calculation for both the three and nine months ended September 30, 2011 exclude the potential exercise of 0.1 million stock options. These options were considered anti-dilutive because the exercise prices exceeded the average price of our stock during those periods. None of our stock appreciation rights (“SARS”) were anti-dilutive for the three and nine months ended September 30, 2011. Because of our loss from continuing operations for the three and nine months ended September 30, 2010, 3.2 million stock options and 0.4 million SARS were excluded from the calculation of our diluted earnings per share, as the potential exercise of those securities would be anti-dilutive in those periods.