Earnings Per Share

9 Months Ended

Sep. 30, 2020

Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding. The table below shows our basic and diluted EPS calculations.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	98,938	$	50,580	$	220,094	$	145,723
Less: distributed earnings allocated to participating securities	(148)		(122)		(404)		(343)
Less: undistributed earnings allocated to participating securities	(502)		(202)		(952)		(554)
Net income attributable to common stockholders (numerator for basic earnings per share)	98,288		50,256		218,738		144,826
Add back: undistributed earnings allocated to participating securities	502		202		952		554
Less: undistributed earnings reallocated to participating securities	(488)		(195)		(929)		(540)
Numerator for diluted earnings per share under two class method	$	98,302	$	50,263	$	218,761	$	144,840

Denominator
Weighted-average common shares outstanding	63,868,486		61,978,195		63,129,077		61,422,925
Add: dilutive effect of stock options	1,810,624		1,990,020		1,599,722		1,570,194
Add: dilutive effect of performance share units	145,800		—		241,056		367,416
Denominator for diluted earnings per share under two class method	65,824,910		63,968,215		64,969,855		63,360,535

Basic Earnings Per Common Share	$	1.54	$	0.81	$	3.46	$	2.36
Diluted Earnings Per Common Share	$	1.49	$	0.79	$	3.37	$	2.29

Diluted EPS for the three and nine months ended September 30, 2020 excluded options to purchase zero and 0.8 million shares of common stock, respectively, because the effect of their inclusion would be anti-dilutive. For the same periods in 2019, diluted EPS excluded options to purchase 0.4 million and 0.4 million shares, respectively.