Earnings Per Share

9 Months Ended

Sep. 30, 2011

NOTE 6

Earnings per share. The Company’s basic earnings per share attributable to Stewart was calculated by dividing net earnings (loss) 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 earnings and number of shares are adjusted for the effects of any dilutive shares. Using the if-converted method, net earnings is adjusted for interest expense, net of any tax effects, applicable to the convertible senior notes. 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 stock option plan.

For the three and nine months ended September 30, 2011 and 2010, the Company did not have any dilutive shares under the treasury stock method mentioned above since the exercise prices of the options were greater than the weighted-average market value of the shares, which excludes them from the diluted earnings calculation.

For the nine months ended September 30, 2011, the Company did not present diluted earnings per share using the if-converted method mentioned above since the add back of the tax affected interest expense on the convertible debt resulted in antidilution. Also, since the Company reported a net loss after adjustments related to the if-converted method for the three and nine months ended September 30, 2010, there were no calculations of diluted per share amounts for these period.

The calculation of the diluted earnings per share using the if-converted method is as follows for the three months ended September 30, 2011:


	For the Three
	Months Ended
	September 30,
	2011
	($000’s omitted,
	except per share
	data)

Numerator:
Net earnings attributable to Stewart		4,542
Interest expense, net of tax effects		785

If-converted net earnings attributable to Stewart		5,327


Denominator (000):
Basic average shares outstanding		19,234
Dilutive average number of shares relating to convertible senior notes		5,047
Dilutive average number of shares relating to restricted shares grant		63
Dilutive average shares outstanding		24,344


Diluted earnings per share attributable to Stewart		0.22