Earnings per share

12 Months Ended

Dec. 31, 2012

Earnings per share

NOTE 15

Earnings per share. The Company’s basic earnings per share is calculated by dividing net earnings (loss) by the weighted-average number of shares of Common Stock and Class B Common Stock outstanding during the reporting period.

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 earnings are adjusted for interest expense, net of any tax effects, applicable to the Convertible Senior Notes discussed in Note 10. 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 years ended December 31, 2012, 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.

There were no calculations of diluted earnings per share for the year ended December 31, 2011 using the if-converted method, as the add back of the tax affected interest expense on the convertible debt resulted in antidilution. Additionally, since the Company reported a net loss for the year ended December 31, 2010, there was no calculation of diluted earnings per share under the if-converted method.

The calculation of the diluted earnings per share using the if-converted method is as follows:

	For the Years Ended December 31,
	2012		2011		2010
	($000 omitted)
Numerator:
Net earnings (loss) attributable to Stewart		109,182		2,348		(12,582	)
Interest expense, net of tax effects		3,139		—		—
If-converted net earnings (loss) attributable to Stewart		112,321		2,348		(12,582	)
Denominator (000):
Basic average shares outstanding		19,294		19,131		18,313
Dilutive average number of shares relating to convertible senior notes		5,047		—		—
Dilutive average number of shares relating to restricted shares grant		43		—		—
Dilutive average shares outstanding		24,384		19,131		18,313
Diluted earnings per share attributable to Stewart		4.61		0.12		(0.69	)