Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2013

Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders:

Note 7—Earnings (Loss) Per Share

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

The weighted-average number of shares used in the calculation of basic and diluted earnings (loss) per share attributable to the Company’s common stockholders consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(in thousands)
Basic weighted-average number of shares		19,384		21,037		19,413		21,025
Effect of dilutive securities:
Stock options		40		—		—		—
Non-vested restricted Class B common stock		1,665		—		—		—
Diluted weighted-average number of shares		21,089		21,037		19,413		21,025

The following shares were excluded from the diluted loss per share computations because their inclusion would have been anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(in thousands)
Stock options		—		457		449		457
Non-vested restricted Class B common stock		—		1,988		1,785		1,988
Shares excluded from the calculation of diluted earnings per share		—		2,445		2,234		2,445

The dividends on the 1.9 million shares of Preferred Stock outstanding at September 30, 2013 are expected to reduce net income available to common stockholders by $1.2 million each year, compared to periods prior to the issuance of the Preferred Stock.

An entity affiliated with Lord (Jacob) Rothschild has a one-time option through November 12, 2017 to exchange its GOGAS shares for shares of the Company with equal fair value as determined by the parties. The number of shares issuable in such an exchange is not currently determinable. If this option is exercised, the shares issued by the Company may dilute the earnings per share in future periods.

An employee of the Company, pursuant to the terms of his employment agreement, has the option to exchange his equity interests in IEI, Afek, and any equity interest that he may acquire in Genie Mongolia or certain other entities that may be created by the Company, for shares of the Company. Employees and directors of the Company that were previously granted restricted stock of IEI have the right to exchange the restricted stock of IEI, upon vesting of such shares, into shares of the Company’s Class B common stock. Also, IDT Energy has the right to exchange the deferred stock units it previously granted to employees and directors of the Company, upon vesting of such units, into shares of the Company’s Class B common stock or to redeem the units for cash. These exchanges, if elected, would be based on the relative fair value of the shares exchanged. The number of shares of the Company’s stock issuable in an exchange is not currently determinable. If shares of the Company’s stock are issued upon such exchange, the Company’s earnings per share may be diluted in future periods.

- Definition

The entire disclosure for earnings per share.

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