Journal Communications Just Filed Its Annual Report: Earnings per shareBa...


Earnings per share

Basic

For all periods during which our class C common stock was issued and outstanding (see Note 2 “Notes Payable” regarding the Company’s repurchase of all 3,264 shares of the Company’s class C common stock issued and outstanding in August 2012), we apply the two-class method for calculating and presenting our basic earnings per share.  As noted in the FASB’s guidance for earnings per share, the two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings.  Under that method:

(a)Income (loss) from continuing operations (“net earnings (loss)”) is reduced by the amount of dividends declared in the current period for each class of stock and by the contractual amount of dividends that must be paid or accrued during the current period.
 
(b)The remaining earnings, which may include earnings from discontinued operations (“undistributed earnings”), are allocated to each class of common stock to the extent that each class of stock may share in earnings if all of the earnings for the period were distributed.

(c)The remaining losses (“undistributed losses”) are allocated to the class A and B common stock.  Undistributed losses are not allocated to the class C common stock and non-vested restricted stock because the class C common stock and the non-vested restricted stock are not contractually obligated to share in the losses. Losses from discontinued operations are allocated to class A and B common stock and may be allocated to class C common stock and non-vested restricted stock if there is undistributed earnings after deducting earnings distributed to class C common stock from income from continuing operations.

(d)The total earnings (loss) allocated to each class of common stock are then divided by the number of weighted average shares outstanding of the class of common stock to which the earnings (loss) are allocated to determine the earnings (loss) per share for that class of common stock.

(e)Basic earnings (loss) per share data are presented for class A and B common stock in the aggregate and for class C common stock.  The basic earnings (loss) per share for class A and B common stock are the same; hence, these classes are reported together.

In applying the two-class method, we have determined that undistributed earnings should be allocated equally on a per share basis among each class of common stock due to the lack of any contractual participation rights of any class to those undistributed earnings.  Undistributed losses are allocated to only the class A and B common stock for the reason stated above.
 
The following table sets forth the computation of basic earnings per share under the two-class method:
 
 
 
2013
  
2012
 
 
 
2011
 
 
 
  
 
 
 
 
Numerator for basic earnings from continuing operations for each class of common stock and non-vested restricted stock:
 
  
 
 
 
 
Earnings form continuing operations
 
$
26,250
  
$
32,582
 
 
 
$
21,713
 
Less dividends:
        
 
    
Class A and B
  
-
   
-
 
 
  
-
 
Minimum class C
  
-
   
1,146
 
 
  
1,854
 
Non-vested restricted stock
  
-
   
-
 
 
  
-
 
 
        
 
    
Total undistributed earnings from continuing operations
 
$
26,250
  
$
31,436
 
 
 
$
19,859
 
 
        
 
    
Undistributed earnings from continuing operations:
        
 
    
Class A and B
 
$
26,250
  
$
29,991
 
 
 
$
18,423
 
Class C
  
-
   
1,233
 
 
  
1,177
 
Non-vested restricted stock
  
-
   
212
 
 
  
259
 
Total undistributed earnings from continuing operations
 
$
26,250
  
$
31,436
 
 
 
$
19,859
 
 
        
 
    
Numerator for basic earnings from continuing operations per class A and B common stock:
        
 
    
Minimum dividends on class A and B
 
$
-
  
$
-
 
 
 
$
-
 
Class A and B undistributed earnings
  
26,250
   
29,991
 
 
  
18,423
 
Numerator for basic earnings from continuing operations per class A and B common stock
 
$
26,250
  
$
29,991
 
 
 
$
18,423
 
 
        
 
    
Numerator for basic earnings from continuing operations per class C common stock:
        
 
    
Minimum dividends on class C
 
$
-
  
$
1,146
 
 
 
$
1,854
 
Class C undistributed earnings
  
-
   
1,233
 
 
  
1,177
 
Numerator for basic earnings from continuing operations per class C common stock
 
$
-
  
$
2,379
 
 
 
$
3,031
 
 
        
 
    
Denominator for basic earnings from continuing operations for each class of common stock:
        
 
    
Weighted average shares outstanding -
        
 
    
Class A and B
  
50,259
   
50,091
 
 
  
51,088
 
Class C
  
-
   
3,264
 
 (1)
  
3,264
 
 
        
 
    
Basic earnings per share from continuing operations:
        
 
    
Class A and B
 
$
0.52
  
$
0.60
 
 
 
$
0.36
 
Class C
 
$
-
  
$
0.73
 
 
 
$
0.93
 

(1)
The weighted average number of shares is calculated only for the period of time which the class C common stock was outstanding during the period, not the entire period.
 
 
 
2013
  
2012
 
 
2011
 
 
 
  
 
 
 
Numerator for basic earnings from discontinued operations for each class of common stock and non-vested restricted stock:
 
  
 
 
 
Total undistributed earnings from discontinued operations
 
$
(49
)
 
$
743
 
 
$
473
 
Undistributed earnings from discontinued operations:
        
    
Class A and B
  
(49
)
  
709
 
  
439
 
Class C
  
-
   
29
 
  
28
 
Non-vested restricted stock
  
-
   
5
 
  
6
 
Total undistributed earnings from discontinued operations
 
$
(49
)
 
$
743
 
 
$
473
 
 
        
    
Denominator for basic earnings from discontinued operations for each class of common stock:
        
    
Weighted average shares outstanding -
        
    
Class A and B
  
50,259
   
50,091
 
  
51,088
 
Class C
  
-
   
3,264
 
(1
)
 
3,264
 
 
             
Basic earnings per share from discontinued operations:
             
Class A and B
 
$
-
  
$
0.01
   
$
0.01
 
Class C
 
$
-
  
$
0.01
   
$
0.01
 
 
             
Numerator for basic net earnings for each class of common stock:
             
Net earnings
 
$
26,201
  
$
33,325
   
$
22,186
 
Less dividends:
             
Class A and B
  
-
   
-
    
-
 
Minimum class C
  
-
   
1,146
    
1,854
 
Non-vested restricted stock
  
-
   
-
    
-
 
Total undistributed net earnings
 
$
26,201
  
$
32,179
   
$
20,332
 
 
             
Undistributed net earnings:
             
Class A and B
 
$
26,201
  
$
30,701
   
$
18,862
 
Class C
  
-
   
1,261
    
1,206
 
Non-vested restricted stock
  
-
   
217
    
264
 
Total undistributed net earnings
 
$
26,201
  
$
32,179
   
$
20,332
 
 
             
Numerator for basic net earnings per class A and B common stock:
             
Dividends on class A and B
 
$
-
  
$
-
   
$
-
 
Class A and B undistributed  net earnings
  
26,201
   
30,701
    
18,862
 
Numerator for basic net earnings per class A and B common stock
 
$
26,201
  
$
30,701
   
$
18,862
 
 
(1)
The weighted average number of shares is calculated only for the period of time which the class C common stock was outstanding during the period, not the entire period.

 
 
2013
  
2012
 
 
2011
 
 
 
  
 
 
 
 
 
  
 
 
 
Numerator for basic net earnings per class C common stock:
 
  
 
 
 
Minimum dividends on class C
 
$
-
  
$
1,146
 
 
$
1,854
 
Class C undistributed net earnings
  
-
   
1,261
 
  
1,206
 
Numerator for basic net earnings per class C common stock
 
$
-
  
$
2,407
 
 
$
3,060
 
 
        
    
Denominator for basic net earnings for each class of common stock:
        
    
Weighted average shares outstanding -
        
    
Class A and B
  
50,259
   
50,091
 
  
51,088
 
Class C
  
-
   
3,264
 
(1
)
 
3,264
 
 
             
Basic net earnings per share:
             
Class A and B
 
$
0.52
  
$
0.61
   
$
0.37
 
Class C
 
$
-
  
$
0.74
   
$
0.94
 
 
(1)
The weighted average number of shares is calculated only for the period of time which the class C common stock was outstanding during the period, not the entire period.
 
Diluted

Diluted earnings per share is computed based upon the assumption that common shares are issued upon exercise of our stock appreciation rights when the exercise price is less than the average market price of our common shares and common shares will be outstanding upon expiration of the vesting periods for our non-vested restricted stock and performance-based restricted stock units.  For the year ended December 29, 2013, 435 non-vested restricted class B common shares and performance-based restricted stock units are not included in the computation of diluted earnings per share because they are anti-dilutive.  For the year ended December 30, 2012, 538 non-vested restricted class B common shares are not included in the computation of diluted earnings per share because they are anti-dilutive.  The class C shares are not converted into class A and B shares because they are anti-dilutive for all periods presented, and therefore are not included in the diluted weighted average shares outstanding.

The following table sets forth the computation of diluted net earnings (loss) per share for class A and B common stock:

 
 
2013
  
2012
  
2011
 
 
 
  
  
 
Numerator for diluted net earnings per share:
 
  
  
 
Dividends on class A and B common stock
 
$
-
  
$
-
  
$
-
 
Total undistributed earnings from continuing operations
  
26,250
   
29,991
   
18,424
 
Total undistributed earnings from discontinued operations
  
(49
)
  
710
   
439
 
Net earnings
 
$
26,201
  
$
30,701
  
$
18,863
 
 
            
Denominator for diluted net earnings per share:
            
Weighted average shares outstanding
  
50,436
   
50,091
   
51,088
 
 
            
Diluted earnings per share:
            
Continuing operations
 
$
0.52
  
$
0.60
  
$
0.36
 
Discontinued operations
  
-
   
0.01
   
0.01
 
Net earnings
 
$
0.52
  
$
0.61
  
$
0.37
 

Diluted earnings per share for the class C common stock is the same as basic earnings per share for the class C common stock because there are no class C common stock equivalents.
 
Prior to the repurchase of the class C common stock, each of the 3,264 class C shares outstanding was convertible at any time at the option of the holder into either (i) 1.363970 class A shares (or a total of 4,452 class A shares) or (ii) 0.248243 class A shares (or a total of 810 class A shares) and 1.115727 class B shares (or a total of 3,642 class B shares).

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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Other recent filings from the company include the following:

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