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Net Income Per Share
 9 Months Ended
Sep. 30, 2012
Net Income Per Share

NOTE 3· Net Income Per Share

Accounting Standards Codification (“ASC”) Topic 260 — Earnings Per Share is the authoritative guidance that states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share (“EPS”) pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Performance stock shares granted to employees under the Company’s Performance Stock Plan and Stock Incentive Plan are considered participating securities as they receive non-forfeitable dividend equivalents at the same rate as common stock.

 

Basic EPS is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

 

     For the three months
ended September 30,		     For the nine months
ended September 30,		  
(in thousands, except per share data)    2012     2011     2012     2011  

Net income

    $ 49,504      $ 44,173      $ 141,408      $ 127,501   

Net income attributable to unvested awarded performance stock

      (1,428 )      (1,395 )      (4,174 )      (3,959 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to common shares

    $ 48,076      $ 42,778      $ 137,234      $ 123,542   
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of common shares outstanding – basic

      143,607        143,212        143,418        142,913   

Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic

      (4,142 )      (4,522 )      (4,233 )      (4,438 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of common shares outstanding for basic earnings per common share

      139,465        138,690        139,185        138,475   

Dilutive effect of stock options

      2,632        1,753        2,584        1,645   
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of shares outstanding – diluted

      142,097        140,443        141,769        140,120   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income per share:

         

Basic

    $ 0.34      $ 0.31      $ 0.99      $ 0.89   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

    $ 0.34      $ 0.30      $ 0.97      $ 0.88