Ecovyst, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Earnings per Share

Earnings per Share

12 Months Ended

Dec. 31, 2019

23. Earnings per Share:

Basic earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares (see Note 22 to these consolidated financial statements for further information regarding outstanding nonvested restricted stock awards).

Diluted earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period, if dilutive. Potential common shares reflect (1) unvested restricted stock awards and restricted stock units with service vesting conditions, (2) performance stock units with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method.

The reconciliation from basic to diluted weighted average shares outstanding is as follows:



	Years ended December 31,
	2019	2018	2017
Weighted average shares outstanding – Basic	134,389,667	133,380,567	111,299,670
Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions	1,159,027	1,304,364	369,367
Weighted average shares outstanding – Diluted	135,548,694	134,684,931	111,669,037

Basic and diluted earnings per share are calculated as follows:



	Years ended December 31,
	2019		2018		2017
Numerator:
Net income attributable to PQ Group Holdings Inc.	$	79,539	$	58,300	$	57,603

Denominator:
Weighted average shares outstanding – Basic	134,389,667		133,380,567		111,299,670
Weighted average shares outstanding – Diluted	135,548,694		134,684,931		111,669,037
Net income per share:
Basic income per share:	$	0.59	$	0.44	$	0.52
Diluted income per share:	$	0.59	$	0.43	$	0.52

The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective year that were excluded from the calculation of diluted earnings per share:



	Years ended December 31,
	2019	2018	2017
Restricted stock awards with performance only targets not yet achieved	1,584,980	1,643,760	1,769,447
Stock options with performance only targets not yet achieved	558,283	586,253	586,523
Anti-dilutive restricted stock awards, restricted stock units and performance stock units	—	5,162	—
Anti-dilutive stock options	863,063	717,612	155,011

Restricted stock awards and stock options with performance only vesting conditions are not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. Options to purchase 621,747 shares of common stock at $16.97 per share that were outstanding during the years ended December 31, 2019 and 2018, and for part of the year ended December 31, 2017, were excluded from the computation of diluted earnings per share for the respective periods, because the combination of the options’ exercise price and remaining unamortized stock-based compensation expense was greater than the average market price of the common shares. Options to purchase 241,316 shares of common stock at $17.50 per share that were outstanding during the year ended December 31, 2019 and for part of the year ended December 31, 2018, were also considered anti-dilutive and excluded from the computation of diluted earnings per share. The 621,747 stock options expire on October 2, 2027, while the 241,316 stock options expire on August 9, 2028. All of the options were outstanding as of December 31, 2019. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.