Note 4 - Earnings Per Common Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Text Block]

Earnings Per Share [Text Block]

4.       Earnings Per Common Share

We compute earnings per share in accordance with ASC Topic 260, Earnings per Share (“ASC 260”), which requires earnings per share for each class of stock (common stock and participating preferred stock) to be calculated using the two-class method. The two-class method is an allocation of earnings between the holders of common stock and a company's participating security holders. Under the two-class method, earnings for the reporting period are allocated between common shareholders and other security holders based on their respective participation rights in undistributed earnings. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method.

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of shares of basic common stock outstanding. Our Series B junior participating convertible preferred stock (“Series B Preferred Stock”), which is convertible into shares of our common stock at the holder’s option (subject to a limitation based upon voting interest), and our unvested restricted stock, are classified as participating securities in accordance with ASC 260. Net income allocated to the holders of our Series B Preferred Stock and unvested restricted stock is calculated based on the shareholders’ proportionate share of weighted average shares of common stock outstanding on an if-converted basis.

For purposes of determining diluted earnings per common share, basic earnings per common share is further adjusted to include the effect of potential dilutive common shares outstanding, including stock options, stock appreciation rights, performance share awards and unvested restricted stock using the more dilutive of either the two-class method or the treasury stock method, and Series B Preferred Stock and convertible debt using the if-converted method. Under the two-class method of calculating diluted earnings per share, net income is reallocated to common stock, the Series B Preferred stock and all dilutive securities based on the contractual participating rights of the security to share in the current earnings as if all of the earnings for the period had been distributed. In the computation of diluted earnings per share, the two-class method and if-converted method for the Series B Preferred Stock resulted in the same earnings per share amounts as the holder of the Series B Preferred Stock has the same economic rights as the holders of the common stock.

The following table sets forth the components used in the computation of basic and diluted earnings per common share. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands, except per share amounts)
Numerator:
Net income	$	43,136		$	14,263		$	64,960		$	22,786
Less: Net income allocated to preferred shareholder		(14,293	)		(6,130	)		(23,991	)		(9,807	)
Less: Net income allocated to unvested restricted stock		(66	)		(15	)		(82	)		(12	)
Net income available to common stockholders for basic earnings per common share		28,777			8,118			40,887			12,967
Effect of dilutive securities:
Net income allocated to preferred shareholder		14,293			6,130			23,991			9,807
Interest on 1.25% convertible senior notes due 2032, included in cost of sales		41		―				204		―
Net income available to common and preferred stock for diluted earnings per share	$	43,111		$	14,248		$	65,082		$	22,774
Denominator:
Weighted average basic common shares outstanding		243,171,726			195,746,733			228,749,443			195,427,992
Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive)		120,779,819			147,812,786			134,221,626			147,812,786
Total weighted average common shares outstanding if preferred shares converted to common shares		363,951,545			343,559,519			362,971,069			343,240,778
Effect of dilutive securities:
Stock options		7,224,120			5,593,889			7,211,767			5,136,047
1.25% convertible senior notes due 2032		31,312,850		―				31,312,850		―
Weighted average diluted shares outstanding		402,488,515			349,153,408			401,495,686			348,376,825
Income per share:
Basic	$	0.12		$	0.04		$	0.18		$	0.07
Diluted	$	0.11		$	0.04		$	0.16		$	0.06