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Note 12 - Net Income Per Share of Class A and Class B Common Stock
 9 Months Ended
Sep. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]

Note 12. Net Income Per Share of Class A and Class B Common Stock


We compute net income per share of Class A and Class B common stock using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding unvested common shares subject to repurchase or cancellation. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and unvested restricted shares subject to repurchase or cancellation. The dilutive effect of outstanding stock options and other grants is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.


Except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock are identical. Our Restated Articles of Incorporation require that the Class A and Class B common stock share equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation, which would have the effect of adversely altering the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year are allocated based on the participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.


Following is a reconciliation of the income from continuing operations and weighted average shares used for our basic earnings per share (“EPS”) and diluted EPS for the three- and nine-month periods ended September 30, 2014 and 2013 (in thousands, except per share amounts):


Three Months Ended September 30,

 

2014

   

2013

 

Basic EPS from Continuing Operations

 

Class A

   

Class B

   

Class A

   

Class B

 

Numerator:

                               

Income from continuing operations applicable to common stockholders

  $ 31,149     $ 3,388     $ 27,831     $ 3,060  

Distributed income applicable to common stockholders

    (3,765 )     (409 )     (3,030 )     (333 )

Basic undistributed income from continuing operations applicable to common stockholders

  $ 27,384     $ 2,979     $ 24,801     $ 2,727  
                                 

Denominator:

                               

Weighted average number of shares outstanding used to calculate basic income per share

    23,556       2,562       23,304       2,562  
                                 

Basic income per share from continuing operations applicable to common stockholders

  $ 1.32     $ 1.32     $ 1.19     $ 1.19  

Basic distributed income per share from continuing operations applicable to common stockholders

    (0.16 )     (0.16 )     (0.13 )     (0.13 )

Basic undistributed income per share from continuing operations applicable to common stockholders

  $ 1.16     $ 1.16     $ 1.06       1.06  

Three Months Ended September 30,

 

2014

   

2013

 

Diluted EPS from Continuing Operations

 

Class A

   

Class B

   

Class A

   

Class B

 

Numerator:

                               

Distributed income applicable to common stockholders

  $ 3,765     $ 409     $ 3,030     $ 333  

Reallocation of distributed income as a result of conversion of dilutive stock options

    3       (3 )     5       (5 )

Reallocation of distributed income due to conversion of Class B to Class A common shares outstanding

    406       -       328       -  

Diluted distributed income applicable to common stockholders

  $ 4,174     $ 406     $ 3,363     $ 328  

Undistributed income from continuing operations applicable to common stockholders

  $ 27,384     $ 2,979     $ 24,801     $ 2,727  

Reallocation of undistributed income as a result of conversion of dilutive stock options

    28       (28 )     39       (39 )

Reallocation of undistributed income due to conversion of Class B to Class A

    2,951       -       2,688       -  

Diluted undistributed income from continuing operations applicable to common stockholders

  $ 30,363     $ 2,951     $ 27,528     $ 2,688  
                                 

Denominator:

                               

Weighted average number of shares outstanding used to calculate basic income per share from continuing operations

    23,556       2,562       23,304       2,562  

Weighted average number of shares from stock options

    241       -       371       -  

Conversion of Class B to Class A common shares outstanding

    2,562       -       2,562       -  

Weighted average number of shares outstanding used to calculate diluted income per share from continuing operations

    26,359       2,562       26,237       2,562  
                                 

Diluted income per share from continuing operations applicable to common stockholders

  $ 1.31     $ 1.31     $ 1.18     $ 1.18  

Diluted distributed income per share from continuing operations applicable to common stockholders

    (0.16 )     (0.16 )     (0.13 )     (0.13 )

Diluted undistributed income per share from continuing operations applicable to common stockholders

  $ 1.15       1.15       1.05       1.05  

Three Months Ended September 30,

 

2014

   

2013

 

Diluted EPS

 

Class A

   

Class B

   

Class A

   

Class B

 

Antidilutive Securities

                               

Shares issuable pursuant to stock options not included since they were antidilutive

    13       -       14       -  

Nine Months Ended September 30,

 

2014

   

2013

 

Basic EPS from Continuing Operations

 

Class A

   

Class B

   

Class A

   

Class B

 

Numerator:

                               

Income from continuing operations applicable to common stockholders

  $ 85,124     $ 9,277     $ 70,063     $ 7,991  

Distributed income applicable to common stockholders

    (10,578 )     (1,153 )     (6,031 )     (688 )

Basic undistributed income from continuing operations applicable to common stockholders

  $ 74,546     $ 8,124     $ 64,032     $ 7,303  
                                 

Denominator:

                               

Weighted average number of shares outstanding used to calculate basic income per share

    23,509       2,562       23,137       2,639  
                                 

Basic income per share from continuing operations applicable to common stockholders

  $ 3.62     $ 3.62     $ 3.03     $ 3.03  

Basic distributed income per share from continuing operations applicable to common stockholders

    (0.45 )     (0.45 )     (0.26 )     (0.26 )

Basic undistributed income per share from continuing operations applicable to common stockholders

  $ 3.17     $ 3.17     $ 2.77     $ 2.77  

Nine Months Ended September 30,

 

2014

   

2013

 

Diluted EPS from Continuing Operations

 

Class A

   

Class B

   

Class A

   

Class B

 

Numerator:

                               

Distributed income applicable to common stockholders

  $ 10,578     $ 1,153     $ 6,031     $ 688  

Reallocation of distributed income as a result of conversion of dilutive stock options

    12       (12 )     10       (10 )

Reallocation of distributed income due to conversion of Class B to Class A common shares outstanding

    1,141       -       678       -  

Diluted distributed income applicable to common stockholders

  $ 11,731     $ 1,141     $ 6,719     $ 678  

Undistributed income from continuing operations applicable to common stockholders

  $ 74,546     $ 8,124     $ 64,032     $ 7,303  

Reallocation of undistributed income as a result of conversion of dilutive stock options

    82       (82 )     107       (107 )

Reallocation of undistributed income due to conversion of Class B to Class A

    8,042       -       7,196       -  

Diluted undistributed income from continuing operations applicable to common stockholders

  $ 82,670     $ 8,042     $ 71,335     $ 7,196  
                                 

Denominator:

                               

Weighted average number of shares outstanding used to calculate basic income per share from continuing operations

    23,509       2,562       23,137       2,639  

Weighted average number of shares from stock options

    266       -       383       -  

Conversion of Class B to Class A common shares outstanding

    2,562       -       2,639       -  

Weighted average number of shares outstanding used to calculate diluted income per share from continuing operations

    26,337       2,562       26,159       2,639  
                                 

Diluted income per share from continuing operations applicable to common stockholders

  $ 3.58     $ 3.58     $ 2.98     $ 2.98  

Diluted distributed income per share from continuing operations applicable to common stockholders

    (0.45 )     (0.45 )     (0.26 )     (0.26 )

Diluted undistributed income per share from continuing operations applicable to common stockholders

  $ 3.13     $ 3.13     $ 2.72       2.72  

Nine Months Ended September 30,

 

2014

   

2013

 

Diluted EPS

 

Class A

   

Class B

   

Class A

   

Class B

 

Antidilutive Securities

                               

Shares issuable pursuant to stock options not included since they were antidilutive

    13       -       17       -