Earnings Per Share

12 Months Ended

Dec. 28, 2014

Earnings Per Share

Earnings Per Share

4.  Earnings per Share

We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. We consider time-based restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights. Under the two-class method, undistributed earnings allocated to participating securities are subtracted from net income attributable to the Company in determining net income attributable to common shareholders.

Additionally, in accordance with ASC 480, Distinguishing Liabilities from Equity, the increase in the redemption value for the noncontrolling interest of PJ Denver, LLC reduces income attributable to common shareholders.

Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consists of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities.

The calculations of basic earnings per common share and diluted earnings per common share for the years ended December 28, 2014, December 29, 2013 and December 30, 2012 are as follows (in thousands, except per share data):

	2014			2013			2012
Basic earnings per common share:
Net income attributable to the Company	$	73,315		$	69,537		$	61,660
Increase in noncontrolling interest redemption value	(44		)	(510		)	—
Net income attributable to participating securities	(402		)	(530		)	—
Net income attributable to common shareholders	$	72,869		$	68,497		$	61,660
Weighted average common shares outstanding	40,960			43,387			46,916
Basic earnings per common share	$	1.78		$	1.58		$	1.31
Diluted earnings per common share:
Net income attributable to common shareholders	$	72,869		$	68,497		$	61,660
Weighted average common shares outstanding	40,960			43,387			46,916
Dilutive effect of outstanding equity awards	758			856			894
Diluted weighted average common shares outstanding	41,718			44,243			47,810
Diluted earnings per common share	$	1.75		$	1.55		$	1.29

Shares subject to options to purchase common stock with an exercise price greater than the average market price for the year were not included in the computation of diluted earnings per common share because the effect would have been antidilutive. The weighted average number of shares subject to antidilutive options was 226,000 in 2014 and 129,000 in 2013 (none in 2012).

See Note 6 for additional information regarding our noncontrolling interests and Note 18 for equity awards, including restricted stock.