Earnings per share

9 Months Ended

Sep. 30, 2015

Earnings per share. The Company’s basic earnings per share attributable to Stewart is calculated by dividing net income attributable to Stewart by the weighted-average number of shares of Common Stock and Class B Common Stock outstanding during the reporting periods.

To calculate diluted earnings per share, net income and number of shares are adjusted for the effects of any dilutive shares. Using the if-converted method, net income is adjusted for interest expense, net of any tax effects, applicable to the Convertible Senior Notes, which were fully converted into common stock during October 2014. The number of shares is adjusted by adding the number of dilutive shares, assuming they are issued, during the same reporting period. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s long term incentive and stock option plans. In periods of loss, dilutive shares are excluded from the calculation of the diluted earnings per share and diluted earnings per share is computed in the same manner as basic earnings per share.

The calculation of the basic and diluted (loss) earnings per share is as follows:



	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2015		2014	2015		2014
	($000 omitted)
Numerator:
Net (loss) income attributable to Stewart	(13,467	)	23,717	(8,809	)	17,890
Interest expense, net of tax effects	—		314	—		941
If-converted net (loss) income attributable to Stewart	(13,467	)	24,031	(8,809	)	18,831

Denominator (000):
Basic average shares outstanding	23,286		22,267	23,631		22,416
Average number of dilutive shares relating to options	—		1	—		1
Average number of dilutive shares relating to convertible senior notes	—		2,111	—		2,111
Average number of dilutive shares relating to grants of restricted shares	—		284	—		284
Diluted average shares outstanding	23,286		24,663	23,631		24,812

Basic (loss) earnings per share attributable to Stewart	(0.58	)	1.07	(0.37	)	0.80

Diluted (loss) earnings per share attributable to Stewart	(0.58	)	0.97	(0.37	)	0.76