Mercury Insurance 2011 Annual Report Download - page 114

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
NOTES STATEMENTS TO CONSOLIDATED FINANCIAL—(Continued)
The fair value of the restricted stock grant was determined based on the market price on the date of grant.
Compensation cost has been recognized based on management’s best estimates that performance goals will be
achieved. If such goals are not met as of the end of the three-year performance period, no compensation cost
would be recognized and any recognized compensation cost would be reversed. Total compensation costs were
$460,000 and $161,000 during 2011 and 2010, respectively, and the corresponding income tax benefits
recognized in the income statement were $161,000 and $57,000, respectively. As of December 31, 2011, there
was $1,491,000 of unrecognized compensation cost that is expected to be recognized over the next two years. A
summary of the restricted stock and restricted stock units activity as of December 31, 2011 and 2010, and
changes during the years then ended is as follows:
2011 2010
Shares
Weighted-
Average Fair
Value per Share Shares
Weighted-
Average Fair
Value per Share
Outstanding at January 1 ............................. 55,000 $41.40 0 $ 0.00
Granted .......................................... 80,000 40.22 55,000 41.40
Vested ........................................... 0 0
Forfeited/Canceled ................................. 0 0
Outstanding at December 31 .......................... 135,000 $40.70 55,000 $41.40
16. Earnings Per Share
A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculation
for income from operations is presented below:
2011 2010 2009
Income
(Numerator)
Weighted
Shares
(Denominator)
Per-Share
Amount
Income
(Numerator)
Weighted
Shares
(Denominator)
Per-Share
Amount
Income
(Numerator)
Weighted
Shares
(Denominator)
Per-Share
Amount
(Amounts in thousands, except per share data)
Basic EPS
Income available to
common
stockholders .... $191,164 54,825 $3.49 $152,198 54,792 $2.78 $403,072 54,770 $7.36
Effect of dilutive
securities:
Options .......... 0 20 0 34 0 322
Diluted EPS
Income available to
common
stockholders after
assumed
conversions .... $191,164 54,845 $3.49 $152,198 54,826 $2.78 $403,072 55,092 $7.32
Incremental shares of 504,000, 448,000, and 685,000 for 2011, 2010, and 2009, respectively, were excluded
from the computation of the diluted earnings per common shares due to their anti-dilutive effect. Potentially
dilutive securities representing approximately 103,000, 93,000, and 74,000 shares of common stock for 2011,
2010, and 2009, respectively, were also excluded from the computation of diluted earnings per common share
because their effect would have been anti-dilutive.
94