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Earnings Per Common Share

9 Months Ended

Sep. 30, 2023

Earnings Per Common Share

Earnings Per Common Share

13. Earnings Per Common Share

Basic earnings per common share is computed using the two–class method, which is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two–class method, basic earnings per common share is determined by dividing net income, after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock–settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses.

Diluted earnings per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding performance–based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would have been anti–dilutive.

The following table shows the calculation of net income attributable to common stockholders, which is used in the calculation of basic and diluted earnings per common share, potential shares of common stock that were included in computing diluted earnings per common share and the potential shares of common stock issuable that were excluded from computing diluted earnings per common share as their inclusion would have been anti–dilutive:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(in thousands)		2023			2022			2023			2022
Net income		$	30,858		$	15,371		$	71,996		$	33,838
Less: Allocation of earnings to participating securities			(434)			(294)			(1,418)			(1,114)
Net income attributable to common stockholders		$	30,424		$	15,077		$	70,578		$	32,724

Weighted average common shares outstanding used in basic earnings per common share			154,163			153,550			154,210			153,168
Effect of dilutive securities:
Performance-based restricted stock units			235			131			181			125
ESPP shares			3			6			7			4
Weighted average common shares outstanding used in diluted earnings per common share			154,401			153,687			154,398			153,297