Note 13 – Earnings Per Share

In June 2008, the FASB issued authoritative guidance under ASC 260, “Earnings Per Share.” The guidance under ASC 260 holds that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are “participating securities” as defined in ASC 260, and therefore should be included in computing earnings per share (EPS) using the two-class method.

The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes two or more classes of common stock or common stock and participating securities. It determines EPS based on dividends declared on common stock and participating securities and participation rights of participating securities in any undistributed earnings.

The following table illustrates basic and diluted EPS under the guidance of ASC 260 for the three months ended June 30, 2011 and 2010:


	Three months ended June 30, 2011					Three months ended June 30, 2010

(in thousands, except per share data)	Common Stock			Participating Securities		Common Stock			Participating Securities

Basic EPS:
Net income	$	53,747					49,704
Less income allocated to nonvested awards		(191	)		191		(250	)		250

Net income allocated to common stock for EPS calculation (a)	$	53,556			191		49,454			250

Average common shares outstanding (b)		191,935			690		196,347			998

Basic EPS (a)/(b)	$	0.28			0.28		0.25			0.25


Diluted EPS:
Net income	$	53,747					49,704
Less income allocated to nonvested awards		(190	)		190		(250	)		250

Net income allocated to common stock for EPS calculation (c)	$	53,557			190		49,454			250

Average common shares outstanding		191,935			690		196,347			998
Increase due to assumed issuance of shares related to common equivalent shares outstanding		459					85

Average common and common equivalent shares outstanding (d)		192,394			690		196,432			998

Diluted EPS (c)/(d)	$	0.28			0.28		0.25			0.25

The following table illustrates basic and diluted EPS under the guidance of ASC 260 for the six months ended June 30, 2011 and 2010:



	Six months ended June 30, 2011					Six months ended June 30, 2010

(in thousands, except per share data)	Common Stock			Participating Securities		Common Stock			Participating Securities

Basic EPS:
Net income	$	102,537					101,030
Less income allocated to nonvested awards		(383	)		383		(514	)	514

Net income allocated to common stock for EPS calculation (a)	$	102,154			383		100,516		514

Average common shares outstanding (b)		192,390			727		196,254		1,007

Basic EPS (a)/(b)	$	0.53			0.53		0.51		0.51


Diluted EPS:
Net income	$	102,537					101,030
Less income allocated to nonvested awards		(382	)		382		(514	)	514

Net income allocated to common stock for EPS calculation (c)	$	102,155			382		100,516		514

Average common shares outstanding		192,390			727		196,254		1,007
Increase due to assumed issuance of shares related to common equivalent shares outstanding		366					87

Average common and common equivalent shares outstanding (d)		192,756			727		196,341		1,007

Diluted EPS (c)/(d)	$	0.53			0.53		0.51		0.51

The diluted EPS calculation excludes stock options and nonvested awards that are convertible into 4.0 million and 4.7 million common shares for the three and six months ended June 30, 2011, respectively and excludes 8.6 million common shares for the three and six months ended June 30, 2010 because their inclusion would have been anti-dilutive.