4.Earnings per Share

ASC 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to employees restricted stock grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities under ASC 260. As such, we are required to include these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.

Basic earnings per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented.

Diluted earnings per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and nonvested restricted stock.

Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested restricted stock grants that receive dividends, which are considered participating securities.

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


	Three Months Ended
	December 31,
	2017		2016
	(in thousands, except per share amounts)

Numerator:
Income (loss) from continuing operations	$	500,642	$	(34,554)
Loss from discontinued operations		(536)		(509)
Net income (loss)		500,106		(35,063)
Adjustment for basic earnings per share
Earnings allocated to unvested shareholders		(3,537)		(446)
Numerator for basic earnings per share:
From continuing operations		497,105		(35,000)
From discontinued operations		(536)		(509)
		496,569		(35,509)
Adjustment for diluted earnings per share:
Effect of reallocating undistributed earnings of unvested shareholders		10		—
Numerator for diluted earnings per share:
From continuing operations		497,115		(35,000)
From discontinued operations		(536)		(509)
	$	496,579	$	(35,509)
Denominator:
Denominator for basic earnings per share - weighted-average shares		108,683		108,276
Effect of dilutive shares from stock options and restricted stock		412		—
Denominator for diluted earnings per share - adjusted weighted-average shares		109,095		108,276
Basic earnings per common share:
Income (loss) from continuing operations	$	4.57	$	(0.33)
Loss from discontinued operations		—		—
Net income (loss)	$	4.57	$	(0.33)
Diluted earnings per common share:
Income (loss) from continuing operations	$	4.55	$	(0.33)
Loss from discontinued operations		—		—
Net income (loss)	$	4.55	$	(0.33)

We had a net loss for the three months ended December 31, 2016. Accordingly, our diluted earnings per share calculation for the three months ended December 31, 2016 was equivalent to our basic earnings per share calculation since diluted earnings per share excluded any assumed exercise of equity awards. These were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period.

The following shares attributable to outstanding equity awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:


	Three Months Ended
	December 31,
	2017		2016
	(in thousands, except per share amounts)

Shares excluded from calculation of diluted earnings per share		3,377		555
Weighted-average price per share	$	63.47	$	80.63