Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2012

Earnings (Loss) Per Share

4. Earnings (Loss) Per Share

A company that has participating security holders (for example, unvested restricted stock that has non-forfeitable dividend rights) is required to utilize the two-class method for purposes of calculating earnings (loss) per share (“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 or loss). Currently, we have one class of security and we have participating security holders consisting of shareholders of unvested restricted stock. The following table shows basic and diluted EPS calculations:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(Dollars in thousands, except per share amounts)
Basic and Diluted Earnings (Loss) Per Common Share:
Net income (loss)	$	20,126		$	(31,710	)	$	33,029		$	(79,569	)
Less: distributed and undistributed earnings allocated to participating securities		(280	)		(215	)		(450	)		(580	)
Earnings (loss) attributable to common stockholders	$	19,846		$	(31,925	)	$	32,579		$	(80,149	)
Basic weighted-average shares outstanding		47,761,307			46,736,638			47,499,429			46,717,408
Dilutive effect of common stock equivalents		412,008			—			318,759			—
Diluted weighted-average common shares outstanding, assuming conversion of common stock equivalents		48,173,315			46,736,638			47,818,188			46,717,408
Basic Earnings (Loss) Per Common Share	$	0.42		$	(0.68	)	$	0.69		$	(1.72	)
Diluted Earnings (Loss) Per Common Share	$	0.41		$	(0.68	)	$	0.68		$	(1.72	)

Diluted EPS includes the dilutive effect of common stock equivalents and is computed using the weighted-average number of common stock and common stock equivalents outstanding during the reporting period. Common stock equivalents include stock options and unvested restricted stock. A total of 1.0 million unvested performance-based stock options were excluded from the calculation of diluted EPS for both the three and nine months ended September 30, 2012 as the performance-based conditions were not met during such periods. Diluted EPS for the three and nine months ended September 30, 2012 also excluded options to purchase approximately 3.7 million shares and 4.9 million shares, respectively, of common stock because the effect of their inclusion would be anti-dilutive. There was no dilutive effect of common stock equivalents for the three and nine months ended September 30, 2011 because the effect of their inclusion would decrease the reported loss per share.