(8) Earnings Per Share

The Company has outstanding common stock and equity awards that consist of restricted stock, RSUs and stock options. The restricted stock and 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 restricted stock and 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 (excluding unvested restricted stock) 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 any dividends and undistributed earnings allocated to unvested restricted stock and unvested RSUs from net income 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 stock options outstanding on EPS using the treasury-stock method. Under this method, we determine the proceeds that would be received from the exercise of the stock options outstanding, which includes cash received for the exercise price, the remaining unrecognized stock option compensation expense and the resulting effect on the income tax deduction from the exercise of stock options. We then use the average market price of our common shares during the period the stock options were outstanding to determine how many shares we could repurchase with the proceeds raised from the exercise of the stock options outstanding. 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 follows.

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands, except per-share amounts)
Basic EPS:
Numerator (continuing operations):
Income from continuing operations	$	49,350		$	41,613		$	141,924		$	134,369
Income attributable to unvested participating securities		(379	)		(447	)		(1,196	)		(1,546	)
Income from continuing operations used in calculating basic EPS	$	48,971		$	41,166		$	140,728		$	132,823
Numerator (discontinued operations):
Income (loss) from discontinued operations	$	-		$	(18	)	$	-		$	1,578
Income attributable to unvested participating securities		-			-			-			(18	)
Income (loss) from discontinued operations used in calculating basic EPS	$	-		$	(18	)	$	-		$	1,560
Denominator:
Weighted-average vested shares		50,082			54,713			51,494			54,953
Basic EPS from continuing operations	$	0.98		$	0.75		$	2.73		$	2.42
Basic EPS from discontinued operations	$	-		$	-		$	-		$	0.03

Diluted EPS:
Numerator (continuing operations):
Income from continuing operations	$	49,350		$	41,613		$	141,924		$	134,369
Income attributable to unvested participating securities		(379	)		(447	)		(1,196	)		(1,546	)
Income from continuing operations used in calculating diluted EPS	$	48,971		$	41,166		$	140,728		$	132,823
Numerator (discontinued operations):
Income (loss) from discontinued operations	$	-		$	(18	)	$	-		$	1,578
Income attributable to unvested participating securities		-			-			-			(18	)
Income (loss) from discontinued operations used in calculating diluted EPS	$	-		$	(18	)	$	-		$	1,560
Denominator:
Weighted-average vested shares		50,082			54,713			51,494			54,953
Dilutive effect of incremental shares to be issued for equity awards		22			31			32			25
Weighted-average shares used in calculating diluted EPS		50,104			54,744			51,526			54,978
Diluted EPS from continuing operations	$	0.98		$	0.75		$	2.73		$	2.41
Diluted EPS from discontinued operations (1)	$	-		$	-		$	-		$	0.03

(1)

Less than $0.01 for the three months ended September 30, 2014.