Earnings per Share and Stock Splits

The basic and diluted earnings per share (“EPS”), and the basic and diluted weighted average shares outstanding for all periods presented in the accompanying Consolidated Statements of Income have been adjusted to reflect the retroactive effect of the Company’s three-for-one stock split dated January 4, 2010.



	For the year ended December 31,
	(In thousands, except per share amounts)
Earnings per share:	2011		2010		2009
Basic earnings per common share	$	1.89	$	1.69	$	1.24
Diluted earnings per common share	$	1.75	$	1.51	$	1.03
Basic weighted average shares outstanding	37,742		34,845		31,398
Diluted weighted average shares outstanding	40,889		39,018		38,014

To calculate diluted earnings per share, interest expense related to convertible debt excluding imputed interest, was added back to net income as follows:



	For the year ended December 31,
	(in thousands)
	2011		2010		2009
Net income	$	71,378	$	59,019	$	38,822
Convertible debt interest (excludes imputed interest)	—		10		466
Net income for diluted earnings per share purposes	$	71,378	$	59,029	$	39,288
Diluted shares outstanding *	40,889		39,018		38,014
Diluted earnings per common share *	$	1.75	$	1.51	$	1.03



*		Adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010

Basic EPS is equal to net income divided by the weighted average number of shares of common stock outstanding for the period. Diluted EPS takes into consideration common stock equivalents which for the Company consist of stock options, restricted stock, and convertible debt. With respect to stock options, diluted EPS is calculated as if the Company had additional common stock outstanding from the beginning of the year or the date of grant or issuance, net of assumed repurchased shares using the treasury stock method. With respect to convertible debt, diluted EPS is calculated as if the debt instrument had been converted at the beginning of the reporting period or the date of issuance, whichever is later. Diluted EPS is equal to net income plus interest expense on convertible debt, divided by the combined sum of the weighted average number of shares outstanding and common stock equivalents. At December 31, 2011 there were 90,000 potentially issuable shares with respect to stock options which could dilute EPS in the future but which were excluded from the diluted EPS calculation because presently their effect is anti-dilutive. Diluted shares outstanding determined as follows for each years ending December 31, 2011, 2010, and 2009.



	For the year ended December 31,
	2011	2010	2009
Basic wtd. avg. shares outstanding	37,741,927	34,845,126	31,398,263
Incremental shares for common stock equivalents	3,147,516	4,173,187	6,616,094
Diluted shares outstanding	40,889,443	39,018,313	38,014,357

On October 10, 2009 the Company’s Board of Directors approved a 3-for-1 stock split on shares of its common stock (“the “2010 Stock Split”) in the form of a stock dividend. The 2010 Stock Split was effective as of January 4, 2010 for all shares outstanding as of the close of business on December 21, 2009 (the record date). As a result of the 2010 Stock Split, every share of the Company’s common stock was converted into three shares of the Company’s common stock. Each stockholder’s percentage ownership in the Company and proportional voting power remains unchanged after the 2010 Stock Split. Furthermore, as a result of the 2010 Stock Split approximately 23.0 million additional shares of common stock were issued and the Company’s issued and outstanding common stock increased to approximately 34.5 and 34.4 million shares, respectively. The issuance of the additional shares has been accounted for as a stock dividend by the transfer of approximately $2.3 million from additional paid-in capital to common stock. Shares reserved for issuance under the Company’s 1996 Incentive Compensation Program, as amended and restated in 2006, and for the Company’s outstanding convertible promissory notes issued in August 2009 were similarly adjusted.