Computation of Earnings per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Computation of Earnings per Share

Note 2. Computation of Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the same method as basic EPS, however, the computation reflects the potential dilution that would occur if outstanding in-the-money stock options were exercised and converted into common stock.

Unvested stock-based compensation awards containing non-forfeitable rights to dividends are considered participating securities, and therefore are included in the two-class method for calculating EPS. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities, based on their respective rights to receive dividends. The Company grants restricted stock to certain employees under its stock-based compensation plans. Recipients receive cash dividends during the vesting periods of these awards, including on the unvested portion of such awards. Since these dividends are non-forfeitable, the unvested awards are considered participating securities and therefore have earnings allocated to them.

The following table presents the Company’s computation of basic and diluted EPS for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share data)	2014			2013			2014			2013
Net income	$	120,258		$	114,200		$	354,200		$	355,392
Less: Dividends paid on and earnings allocated to    participating securities		(851	)		(723	)		(2,500	)		(2,248	)
Earnings applicable to common stock	$	119,407		$	113,477		$	351,700		$	353,144
Weighted average common shares outstanding		441,127,550			439,435,579			440,953,121			439,199,487
Basic earnings per common share	$	0.27		$	0.26		$	0.80		$	0.80
Earnings applicable to common stock	$	119,407		$	113,477		$	351,700		$	353,144
Weighted average common shares outstanding		441,127,550			439,435,579			440,953,121			439,199,487
Potential dilutive common shares (1)		--			--			--			3,971
Total shares for diluted earnings per share computation		441,127,550			439,435,579			440,953,121			439,203,458
Diluted earnings per common share and common share equivalents	$	0.27		$	0.26		$	0.80		$	0.80

(1) Options to purchase 58,560 shares of the Company’s common stock that were outstanding in the three and nine months ended September 30, 2014, at a weighted average exercise price of $18.04, were excluded from the respective computations of diluted EPS because their inclusion would have had an antidilutive effect. Options to purchase 62,040 shares of the Company’s common stock that were outstanding in the three and nine months ended September 30, 2013, at a weighted average exercise price of $17.95, were excluded from the respective computations of diluted EPS because their inclusion also would have had an antidilutive effect.