1 EXHIBIT 11 THE PROGRESSIVE CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (millions - except per share amounts) (unaudited) Three Months Six Months ---------------------------------------- ---------------------------------------- Periods Ended June 30, 1997 1996 1997 1996 -------------------- ------------------- -------------------- ------------------ Per Per Per Per Amount Share Amount Share Amount Share Amount Share -------------------- ------------------- -------------------- ------------------ PRIMARY: Net income $102.1 $ 78.4 $178.6 $141.8 Less: Preferred stock dividends -- (1.2) -- (3.5) Excess of preferred stock liquidation price over carrying value -- (2.9) -- (2.9) ------------ ---------- ----------- ---------- Income available to common shareholders $102.1 $1.36 $ 74.3 $1.01 $178.6 $2.39 $135.4 $1.83 ==================== =================== ==================== ================== Average shares outstanding 71.9 71.4 71.8 71.8 Net effect of dilutive stock options 3.1 2.2 3.0 2.3 ------------ ---------- ----------- ---------- Total 75.0 73.6 74.8 74.1 ============ ========== =========== ========== FULLY DILUTED: Net income $102.1 $78.4 $178.6 $141.8 Less: Preferred stock dividends -- (1.2) -- (3.5) Excess of preferred stock liquidation price over carrying value -- (2.9) -- (2.9) ------------ ---------- ----------- ---------- Income available to common shareholders $102.1 $1.36 $74.3 $1.01 $178.6 $2.37 $135.4 $1.83 ==================== =================== ==================== ================== Average shares outstanding 71.9 71.4 71.8 71.8 Net effect of dilutive stock options 3.4 2.3 3.5 2.3 ------------ ---------- ----------- ---------- Total 75.3 73.7 75.3 74.1 ============ ========== =========== ==========