Earnings (Loss) Per Common Share

3 Months Ended

Mar. 31, 2012

Earnings (Loss) Per Common Share [Abstract]

Earnings (Loss) Per Common Share

2. Earnings (Loss) Per Common Share

The following table presents a reconciliation of net income and shares used in calculating basic earnings (loss) per common share to those used in calculating diluted earnings (loss) per common share.

	Three Months Ended March  31,
(In millions, except for per share data)	2012			2011
Earnings
Income from continuing operations
Income from continuing operations, net of tax	$	97		$	339
Less: Preferred stock dividends		10			10
Income from continuing operations, net of tax, available to common shareholders		87			329
Add: Dilutive effect of preferred stock dividends		—			10
Income from continuing operations, net of tax, available to common shareholders and assumed conversion of preferred shares	$	87		$	339
Income (loss) from discontinued operations, net of tax	$	(1	)	$	162
Net income
Net income	$	96		$	501
Less: Preferred stock dividends		10			10
Net income available to common shareholders		86			491
Add: Dilutive effect of preferred stock dividends		—			10
Net income available to common shareholders and assumed conversion of preferred shares	$	86		$	501
Shares
Weighted average common shares outstanding, basic		440.7			444.6
Dilutive effect of warrants		26.4			41.1
Dilutive effect of stock compensation plans		1.9			1.8
Dilutive effect of mandatory convertible preferred shares		—			20.7
Weighted average shares outstanding and dilutive potential common shares		469.0			508.2
Earnings (loss) per common share
Basic
Income from continuing operations, net of tax, available to common shareholders	$	0.20		$	0.74
Income (loss) from discontinued operations, net of tax		—			0.36
Net income available to common shareholders	$	0.20		$	1.10
Diluted
Income from continuing operations, net of tax, available to common shareholders	$	0.19		$	0.67
Income (loss) from discontinued operations, net of tax		(0.01	)		0.32
Net income available to common shareholders	$	0.18		$	0.99

For the three months ended March 31, 2012, 20.9 million shares for mandatory convertible preferred shares, along with the related dividend adjustment, would have been antidilutive to the earnings per share calculations. Assuming the impact of the mandatory convertible preferred shares was not antidilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 489.9 million.

The declaration of a quarterly common stock dividend of $0.10 during the first quarter of 2012 triggered a provision in The Hartford’s Warrant Agreement with The Bank of New York Mellon, relating to warrants to purchase common stock issued in connection with the Company’s participation in the Capital Purchase Program, resulting in an adjustment to the warrant exercise price to $9.676 from $9.699.

In addition, the declaration also triggered a provision in The Hartford’s Fixed Conversion Rate Agreement, relating to the Company’s mandatory convertible preferred stock, resulting in an adjustment to the minimum conversion rate to 29.8831 from 29.536 shares of Common Stock per share of Series F Preferred Stock and the maximum conversion rate to 36.4596 from 36.036 shares of Common Stock per share of Series F Preferred Stock.

On March 30, 2012 the Company entered into an agreement with Allianz and repurchased the outstanding Series B and Series C warrants. As a result, Allianz no longer holds potentially dilutive outstanding warrants.