EXHIBIT 11-1 NAC RE CORP. AND SUBSIDIARIES COMPUTATION OF PRIMARY EARNINGS PER SHARE (Dollars in thousands, except per share amounts) PRIMARY EARNINGS PER SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ----------------------- 1996 1995 1996 1995 ---------- ---------- ---------- ---------- Net income applicable to Common Stock $16,038 $17,599 $53,224 $43,568 ========== ========== ========== ========== Average number of common shares outstanding 18,750,668 17,591,170 18,957,387 17,554,752 Add: Assumed exercise of dilutive stock options (1) 400,078 447,314 363,768 387,350 ---------- ---------- ---------- ---------- Common stock and common stock equivalents outstanding 19,150,746 18,038,484 19,321,155 17,942,102 ========== ========== ========== ========== Net income per share assuming dilution of common stock equivalents $0.84 $0.98 $2.75 $2.43 ========== ========== ========== ========== (1) Computed utilizing the average market price of the Common Stock for the period. NOTE: The Company's 5.25% convertible subordinated debentures due 2002 are not considered to be common stock equivalents in the calculation of primary earnings per share. -16-