Note 17 - Earnings Per Share

12 Months Ended

Dec. 31, 2011

17. Earnings Per Share

In June 2008, the FASB issued authoritative guidance which states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.

Effective December 28, 2008, the company adopted the authoritative guidance. The company’s unvested share-based payment awards, such as certain performance shares, restricted shares and restricted share units that contain nonforfeitable rights to dividends, meet the criteria of a participating security. The adoption changed the methodology of computing the company’s earnings per share to the two-class method from the treasury stock method. This change has not affected previously reported earnings per share, consolidated net earnings or net cash flows from operations. Under the two-class method, earnings are allocated between common stock and participating securities. The guidance provides that the presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the company presents basic and diluted earnings per share for its one class of common stock.

The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The company’s reported net earnings is reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stock shareholders for purposes of calculating earnings per share.

The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock or the two-class method. The company has determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation is adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method:

(In thousands, except per share amounts)	2011			2010			2009
Net income as reported	$	87,024		$	78,663		$	9,411
Less: Distributed earnings available to participating securities		(16	)		(3	)		—
Less: Undistributed earnings available to participating securities		(288	)		(411	)		(78	)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$	86,720		$	78,249		$	9,333
Add: Undistributed earnings allocated to participating securities		288			411			78
Less: Undistributed earnings reallocated to participating securities		(283	)		(405	)		(78	)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$	86,725		$	78,255		$	9,333
Denominator for basic earnings per share —
Weighted-average shares		21,901			21,875			21,743
Effect of dilutive securities:
Common stock equivalents		354			339			69
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions		22,255			22,214			21,812
Basic earnings per share	$	3.96		$	3.58		$	0.43
Diluted earnings per share	$	3.90		$	3.52		$	0.43

The following potential shares of common stock attributable to stock options were excluded from the earnings per share calculation because their effect would be anti-dilutive: 85,563 in 2011; 77,729 in 2010; and 1,812,414 in 2009.