3 -

Earnings Per Share

We have two classes of common stock, which we refer to as our Class A common stock and our Class B common stock. Our certificate of incorporation provides that whenever our board of directors declares a dividend on our Class B common stock, our board of directors shall simultaneously declare a dividend on our Class A common stock that is payable to the holders of our Class A common stock at the same time and as of the same record date at a rate that is at least 10% greater than the rate at which our board of directors declared a dividend on our Class B common stock. Accordingly, we use the two-class method to compute our earnings per common share. The two-class method is an earnings allocation formula that determines earnings per share separately for each class of common stock based on dividends we have declared and an allocation of our remaining undistributed earnings using a participation percentage that reflects the dividend rights of each class.

The table below presents for the periods indicated a reconciliation of the numerators and denominators we used to compute basic and diluted net income per share for our Class A common stock and our Class B common stock:


	Three Months Ended March 31,
	2019				2018
	Class A		Class B		Class A			Class B
	(in thousands, except per share data)
Basic earnings (loss) per share:
Numerator:
Allocation of net income (loss)	$	18,843	$	4,180	$	(14,848	)	$	(3,330	)

Denominator:
Weighted-average shares outstanding		22,850		5,577		22,615			5,577

Basic earnings (loss) per share	$	0.82	$	0.75	$	(0.66	)	$	(0.60	)

Diluted earnings (loss) per share:
Numerator:
Allocation of net income (loss)	$	18,843	$	4,180	$	(14,848	)	$	(3,330	)

Denominator:
Number of shares used in basic computation		22,850		5,577		22,615			5,577
Weighted-average shares effect of dilutive securities:
Director and employee stock options		71		—		—			—

Number of shares used in diluted computation		22,921		5,577		22,615			5,577

Diluted earnings (loss) per share	$	0.82	$	0.75	$	(0.66	)	$	(0.60	)

We did not include outstanding options to purchase 8,967,857 shares of Class A common stock in our computation of diluted earnings per share for the three months ended March 31, 2019 because the exercise price of the options exceeded the average market price of our Class A common stock during the period.

We did not include any effect of dilutive securities in the computation of diluted earnings per share for the three months ended March 31, 2018 because we sustained a net loss for this period.