Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2019

For the three months ended March 31, 2019 and 2018, the Company’s basic earnings per share was determined as follows:

	For the Three Months Ended March 31,
	2019		2018
	(in thousands, except share and per share amounts)
Net Income for Basic Earnings per Share Allocated to:
Class A Common Stock	$	3,102	$	3,523
Participating Shares of Restricted Class A Common Stock		—		—
Total Net Income for Basic Earnings per Share	$	3,102	$	3,523
Basic Weighted-Average Shares Outstanding		18,278,773		18,015,368
Add: Participating Shares of Restricted Class A Common Stock¹		—		—
Total Basic Weighted-Average Shares Outstanding		18,278,773		18,015,368
Basic Earnings per Share	$	0.17	$	0.20

Certain unvested shares of Class A common stock granted to employees have nonforfeitable rights to dividends and therefore participate fully in the results of the Company from the date they are granted. They are included in the computation of basic earnings per share using the two-class method for participating securities.

Summary of diluted net income

For the three months ended March 31, 2019 and 2018, the Company’s diluted net income was determined as follows:

	For the Three Months Ended March 31,
	2019		2018
	(in thousands)
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC	$	12,712	$	14,113
Less: Assumed Corporate Income Taxes		3,006		3,410
Assumed After-Tax Income of Pzena Investment Management, LLC		9,706		10,703
Net Income of Pzena Investment Management, Inc.		3,102		3,523
Diluted Net Income	$	12,808	$	14,226

Summary of diluted earnings per share

For the three months ended March 31, 2019 and 2018, the Company’s diluted earnings per share were determined as follows:

	For the Three Months Ended March 31,
	2019		2018
	(in thousands, except share and per share amounts)
Diluted Net Income Allocated to:
Class A Common Stock	$	12,795	$	14,216
Participating Shares of Restricted Class A Common Stock		—		—
Participating Class B Units		13		10
Total Diluted Net Income Attributable to Shareholders	$	12,808	$	14,226

Total Basic Weighted-Average Shares Outstanding		18,278,773		18,015,368
Dilutive Effect of Class B Units		52,117,775		51,032,975
Dilutive Effect of Options¹		642,203		1,603,865
Dilutive Effect of Phantom Class B Units & Phantom Shares of Class A Common Stock		3,102,053		1,517,654
Dilutive Effect of Restricted Shares of Class A Common Stock²		44,120		67,500
Dilutive Weighted-Average Shares Outstanding		74,184,924		72,237,362
Add: Participating Class B Units³		73,196		48,600
Total Dilutive Weighted-Average Shares Outstanding		74,258,120		72,285,962
Diluted Earnings per Share	$	0.17	$	0.20

1	Represents the dilutive effect of options to purchase operating company Class B units and Company Class A common stock.

Certain restricted shares of Class A common stock granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities and are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method.

Unvested Class B Units granted to employees have nonforfeitable rights to dividend equivalent distributions and therefore participate fully in the results of the operating company's operations from the date they are granted. They are included in the computation of diluted earnings per share using the two-class method for participating securities.