1 EXHIBIT NO. 11 -------------- COMPUTATION OF EARNINGS PER SHARE 2 THE PROGRESSIVE CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (millions - except per share amounts) (unaudited) Three Months Nine Months -------------------------------------------- -------------------------------------------- Periods Ended September 30, 1997 1996 1997 1996 -------------------------------------------- -------------------------------------------- Per Per Per Per Amount Share Amount Share Amount Share Amount Share -------------------------------------------- -------------------------------------------- PRIMARY: Net income $116.2 $80.3 $294.8 $222.0 Less: Preferred stock dividends -- -- -- (3.5) Excess of Preferred Stock liquidation price over carrying value -- -- -- (2.9) --------- --------- ----------- --------- Income available to common shareholders $116.2 $1.54 $80.3 $1.08 $294.8 $3.92 $215.6 $2.91 ============================================ ============================================ Average shares outstanding 72.1 71.4 71.9 71.6 Net effect of dilutive stock options 3.5 2.6 3.3 2.5 --------- --------- ----------- --------- Total 75.6 74.0 75.2 74.1 ========= ========= =========== ========= FULLY DILUTED: Net income $116.2 $ 80.3 $294.8 $222.0 Less: Preferred stock dividends -- -- -- (3.5) Excess of Preferred Stock liquidation price over carrying value -- -- -- (2.9) --------- --------- ----------- --------- Income available to common shareholders $116.2 $1.54 $ 80.3 $1.08 $294.8 $3.89 $215.6 $2.89 ============================================ ============================================ Average shares outstanding 72.1 71.4 71.9 71.6 Net effect of dilutive stock options 3.6 2.8 3.8 2.9 --------- --------- ----------- --------- Total 75.7 74.2 75.7 74.5 ========= ========= =========== =========