Earnings Per Share

6 Months Ended

Jun. 30, 2024

(11) Earnings Per Share

The Company has outstanding common stock and equity awards that consist of RSUs and PSUs. All previously remaining outstanding stock options were exercised during the year ended December 31, 2023. The RSUs maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations.

Unvested RSUs are deemed participating securities for purposes of calculating earnings per share (“EPS”) as they maintain dividend rights. We calculate EPS using the two-class method. Under the two-class method, we allocate earnings to common shares and vested RSUs outstanding for the period. Earnings attributable to unvested participating securities, along with the corresponding share counts, are excluded from EPS as reflected in our unaudited condensed consolidated statements of income.

In calculating basic EPS, we deduct from net income any dividends and undistributed earnings allocated to unvested RSUs and then divide the result by the weighted-average number of common shares and vested RSUs outstanding for the period.

We determine the potential dilutive effect of PSUs and stock options outstanding (“contingently-issuable shares”) on EPS using the treasury-stock method. Under this method, we determine the proceeds that would be received from the issuance of the contingently-issuable shares if the end of the reporting period were the end of the contingency period. The proceeds from the contingently-issuable shares include the remaining unrecognized compensation expense of the awards and the cash received for the exercise price on stock options. We then use the average market price of our common shares during the period the contingently-issuable shares were outstanding to determine how many shares we could repurchase with the proceeds raised from the issuance of the contingently-issuable shares. The net incremental share count issued represents the potential dilutive securities. We then reallocate earnings to common shares and vested RSUs by incorporating the increased fully-diluted share count to determine diluted EPS.

The calculation of basic and diluted EPS was as follows:


	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023
	(In thousands, except per-share amounts)
Basic EPS:
Numerator:
Net income	$	1,171		$	144,504		$	139,074		$	272,603
Income attributable to unvested participating securities		(96	)		(609	)		(546	)		(1,190	)
Net income used in calculating basic EPS	$	1,075		$	143,895		$	138,528		$	271,413
Denominator:
Weighted-average vested shares		34,383			36,215			34,633			36,461
Basic EPS	$	0.03		$	3.97		$	4.00		$	7.44

Diluted EPS:
Numerator:
Net income	$	1,171		$	144,504		$	139,074		$	272,603
Income attributable to unvested participating securities		(96	)		(608	)		(546	)		(1,187	)
Net income used in calculating diluted EPS	$	1,075		$	143,896		$	138,528		$	271,416
Denominator:
Weighted-average vested shares		34,383			36,215			34,633			36,461
Dilutive effect of incremental shares to be issued for contingently-issuable shares		-			75			55			84
Weighted-average shares used in calculating diluted EPS		34,383			36,290			34,688			36,545
Diluted EPS	$	0.03		$	3.97		$	3.99		$	7.43