Earnings Per Share (Notes)

9 Months Ended

Sep. 30, 2020

Earnings Per Share

Under ASC 260, Earnings per Share, the two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under that method, basic and diluted earnings per share data are presented for each class of common stock.

In applying the two-class method, we determined that undistributed earnings should be allocated equally on a per share basis between Class A and Class B common stock. Under our Certificate of Incorporation, the holders of the common stock are entitled to participate ratably, on a share-for-share basis as if all shares of common stock were of a single class, in such dividends as may be declared by the Board of Directors. During the nine months ended September 30, 2020 and 2019, we declared and paid a quarterly dividend in the amount of $0.32 per share and $0.27 per share, respectively, on both classes of common stock.

Basic earnings per share has been computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during each period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted earnings per share have been computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during each period.

The net income available to common stockholders and weighted average number of common shares outstanding used to compute basic and diluted earnings per share for each class of common stock are as follows (in thousands, except per share amounts):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Distributed earnings	$	12,915	$	10,823	$	38,685	$	32,360
Undistributed earnings	16,824		17,114		49,681		40,909
Net income	$	29,739	$	27,937	$	88,366	$	73,269

Class A common stock:
Basic net income available to common stockholders	$	20,014	$	18,729	$	59,421	$	49,048
Basic weighted average common shares outstanding	27,139		26,822		27,071		26,706
Basic earnings per share	$	0.74	$	0.70	$	2.19	$	1.84

Diluted net income available to common stockholders	$	20,080	$	18,798	$	59,656	$	49,203
Effect of potential exercise of stock options	274		306		330		257
Diluted weighted average common shares outstanding	27,413		27,128		27,401		26,963
Diluted earnings per share	$	0.73	$	0.69	$	2.18	$	1.82

Class B common stock:
Basic net income available to common stockholders	$	9,725	$	9,208	$	28,945	$	24,221
Basic weighted average common shares outstanding	13,187		13,188		13,187		13,188
Basic earnings per share	$	0.74	$	0.70	$	2.19	$	1.84

Diluted net income available to common stockholders	$	9,659	$	9,139	$	28,710	$	24,066
Diluted weighted average common shares outstanding	13,187		13,188		13,187		13,188
Diluted earnings per share	$	0.73	$	0.69	$	2.18	$	1.82

For the three months ended September 30, 2020 and 2019, options to purchase 201,880 shares and 7,641 shares, respectively, were outstanding but not included in the computation of diluted earnings per share because the options' effect would have been anti-dilutive. For the nine months ended September 30, 2020 and 2019, options to purchase 221,845 shares and 331,994 shares, respectively, were outstanding but not included in the computation of diluted earnings per share because the options' effect would have been anti-dilutive. For the nine months ended September 30, 2020 and 2019, there were 127,467 shares and 255,376 shares, respectively, issued from the exercise of stock options. For the nine months ended September 30, 2020 and 2019 there were 54,433 shares and 76,346 shares, respectively, issued from the vesting of restricted stock units.