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Earnings per share
 3 Months Ended
Mar. 31, 2012
Earnings Per Share [Abstract]  
Earnings per share
Earnings per share
Basic earnings per share (“EPS”) amounts are calculated by dividing earnings available to common shareholders by the weighted average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive common shares outstanding. The following table shows the basic and diluted earnings per share for three months ended March 31, 2012 and 2011:

 
For the three months ended March 31,
 
2012
 
2011
 
Income
Shares (000)
Per-Share
 
Income
Shares (000)
Per-Share
Net income (loss)
$
(4,401
)
 
 
 
$
25,046

 
 
Amount allocated to common shareholders
100
%
 
 
 
91.85
%
 
 
Basic EPS:
 
 
 
 
 
 
 
Income (loss) allocable to common shareholders
(4,401
)
88,727

$
(0.05
)
 
23,005

92,965

$
0.25

Effect of Dilutive Securities:
 
 
 
 
 
 
 
Stock compensation plans
—

—

 
 
—

332

 
Diluted EPS:
 
 
 
 
 
 
 
Income (loss) applicable to common shareholders with assumed conversion
$
(4,401
)
88,727

$
(0.05
)
 
$
23,005

93,297

$
0.25



Impact of our outstanding Series A Convertible Preferred Stock on EPS
Our Series A Convertible Preferred Stock has similar characteristics of a “participating security” as described by ASC 260-10-45 “Participating Securities and the Two-Class Method”. In accordance with the guidance in the ASC 260-10-45, we calculate basic EPS using the Two-Class Method, allocating undistributed income to our preferred shareholder consistent with its participation rights, and diluted EPS using the If-Converted Method, when applicable.
The generally accepted accounting principles for reporting EPS do not require the presentation of basic and diluted EPS for securities other than common stock and the EPS amounts, as presented, only pertain to our common stock.
The Two-Class Method is an earnings allocation formula that determines earnings per share for common shares and participating securities according to dividends declared (or accumulated) and the participation rights in undistributed earnings.
The holders of our convertible preferred stock do not have a contractual obligation to share in the losses of Century. Thus, in periods where we report net losses, we will not allocate the net losses to the convertible preferred stock for the computation of basic or diluted EPS.



Calculation of EPS:
 
Three months ended March 31,
 
2012
2011
Options to purchase common stock outstanding
632,334

650,011

Weighted average service-based stock awards outstanding
345,524

218,000

Excluded from the calculation of diluted EPS:
 
 
Stock options (1)
632,334

349,000

Service-based share award
345,524

—

(1)
These stock option awards were excluded from the calculation of diluted EPS because the exercise price of these options was greater than the average market price of the underlying common stock, except in periods when we had a net loss where all option were excluded because of their antidilutive effect on earnings per share.
During the three months ended March 31, 2012, we repurchased 400,000 shares of our common stock under a stock repurchase program (See Note 5 Shareholders’ Equity for additional information about this program). Shares repurchased under the program are excluded from the calculation of weighted average shares of common stock outstanding.
Service-based stock for which vesting is based upon continued service is not considered issued and outstanding shares of common stock until vested and issued. However, the service-based stock is considered a common stock equivalent and, therefore, the weighted average service-based stock is included, using the treasury stock method, in common shares outstanding for diluted earnings per share computations if they have a dilutive effect on earnings per share.