Net Income per Share of Common Stock

9 Months Ended

Sep. 30, 2011

Net Income per Share of Common Stock [Abstract]

The following table sets forth the computation of basic and diluted earnings per share:



	Three months ended September 30,				Nine months ended September 30,
(dollars in thousands, except earnings per share)	2011		2010		2011		2010
Numerators for earnings per share —
—Net income that is available to common shareholders	$	7,127	$	2,346	$	21,532	$	67,323
Denominator for basic earnings per share —
Weighted average shares outstanding	20,181,558		18,148,127		20,079,412		16,927,812
Effect of stock options and restricted stock units	457,247		391,486		524,769		424,602
Effect of warrants	76,341		1,746,983		122,295		3,305,639
Total effect of dilutive securities	533,588		2,138,469		647,064		3,730,241
Denominator for diluted earnings per share —
—Adjusted weighted average shares and assumed conversions	20,715,146		20,286,596		20,726,476		20,658,053
Basic earnings per share:	$	0.35	$	0.13	$	1.07	$	3.98
Diluted earnings per share:	$	0.34	$	0.12	$	1.04	$	3.26

In October 2009, we entered into a transaction with Merrill Lynch PCG, Inc. to exchange existing 16.0 percent payment-in-kind notes due in December 2011, for a combination of debt and equity securities (Exchange Transaction). As part of the Exchange Transaction, we issued warrants conveying the right to purchase, for $0.01 per share, 3,466,856 shares of Libbey Inc. common stock. These warrants were exercised and shares were issued in August 2010.

When applicable, diluted shares outstanding include the dilutive impact of warrants and restricted stock units. Diluted shares also include the impact of in-the-money employee stock options, which are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the tax-effected proceeds that hypothetically would be received from the exercise of all in-the-money options are assumed to be used to repurchase shares.