The Hartford 2013 Annual Report Download - page 159

F-23
Basic earnings per share is computed based on the weighted average number of common shares outstanding during the year. Diluted
earnings per share includes the dilutive effect of assumed exercise or issuance of warrants and stock-based awards under compensation
plans, and assumed conversion of preferred shares to common using the treasury stock method.
Under the treasury stock method, for warrants and stock-based awards, shares are assumed to be issued and then reduced for the number
of shares repurchaseable with theoretical proceeds at the average market price for the period. Contingently issuable shares are included
for the number of shares issuable assuming the end of the reporting period was the end of the contingency period, if dilutive.
As a result of the losses available to common shareholders for the year ended December 31, 2012, the Company was required to use
basic weighted average common shares outstanding in the calculation of diluted loss per share, since the inclusion of shares for warrants
of 26.0 million, stock compensation plans of 2.2 million and mandatory convertible preferred shares, along with the related dividend
adjustment, of 20.9 million, would have been antidilutive to the earnings (loss) per share calculations. Had there been income available
to common shareholders in 2012, weighted average common shares outstanding and dilutive potential common shares would have
totaled 486.8 million
Under the if-converted method for mandatory convertible preferred stock (see Note 16 - Equity) the conversion to common shares is
assumed if the inclusion of these shares and the related dividend adjustment are dilutive to the earnings per share calculation. For the
year ended December 31, 2011, 20.7 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 498.7 million, for the year ended December 31, 2011.
On March 30, 2012 the Company entered into an agreement with Allianz and repurchased the outstanding Series B and Series C
warrants (see Note 16 - Equity). As a result, Allianz no longer holds potentially dilutive outstanding warrants.
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. Earnings (Loss) per Share (continued)