EXHIBIT 11.0
RLI CORP. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996
1994 1995 1996
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Primary
Net earnings (loss) $(4,775,871) $7,949,541 $25,695,721
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Earnings (loss) per share $(0.61) $1.01 $3.25
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Weighted average shares outstanding 7,786,004 7,849,799 7,896,463
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Fully Diluted
Net earnings (loss) $(4,775,871) $ 7,949,541 $25,695,721
Reduction of interest expense on assumed conversion
of convertible debentures (net of tax) Note (1) Note (1) 1,794,000
Reduced amortization of deferred loan costs on assumed
conversion of convertible debentures (net of tax) Note (1) Note (1) 80,057
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Adjusted net earnings (loss) $(4,775,871) $ 7,949,541 $27,569,778
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Earnings (loss) per share (1) $(0.61) $1.01 $2.85
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Weighted average shares outstanding (1) 7,786,004 7,849,799 7,896,463
Dilutive effect of convertible debentures (2) Note (1) Note (1) 1,769,231
Adjusted weighted average shares outstanding 7,786,004 7,849,799 9,665,694
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NOTES:
(1) Fully diluted earnings per share calculations are based on the weighted
average number of shares of common stock and common stock equivalents
outstanding for the period, assuming full conversion of all convertible
debentures into common stock. Net earnings are adjusted for purposes of this
calculation to eliminate interest and amortization of debt issuance costs on the
convertible debentures net of related income taxes. When the conversion of
convertible debentures increases the earnings per share or reduces the loss per
share, the effect on earnings is antidilutive. Under these circumstances the
fully diluted net earnings or net loss per share is computed assuming no
conversion of the convertible debentures.
(2) On July 28, 1993, RLI Corp. issued $46 million in 6.0% convertible
debentures which mature July 15, 2003. These debentures, unless previously
redeemed, are convertible at the option of the holder at any time prior to
maturity into RLI Corp. common stock at an adjusted conversion price of $26.00
per share, subject to adjustment in certain events. (See Note 4 in the "Notes to
Consolidated Financial Statements" for additional information.)
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