Envestnet, 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, 2014

14. Earnings per Share

Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, common warrants, restricted stock and Convertible Notes using the treasury stock method.

The Company accounts for the effect of the Convertible Notes on diluted net income per share using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company's option. As a result, the Convertible Notes have no effect on diluted net loss per share until the Company's stock price exceeds the conversion price of $62.88 per share. In the period of conversion, the Convertible Notes will have no impact on diluted net income if the Convertible Notes are settled in cash and will have an impact on dilutive net income per share if the Convertible Notes are settled in shares upon conversion.

The following table provides a reconciliation of the numerators and denominators used in computing basic and diluted net income per share attributable to common stockholders:

	Year ended December 31,
	2014		2013		2012
Basic income per share calculation:
Net income attributable to Envestnet, Inc.	$	14,174	$	3,660	$	465


Basic number of weighted-average shares outstanding		34,559,558		33,191,088		32,162,672


Basic net income per share	$	0.41	$	0.11	$	0.01


Diluted income per share calculation:
Net income attributable to Envestnet, Inc.	$	14,174	$	3,660	$	465


Basic number of weighted-average shares outstanding		34,559,558		33,191,088		32,162,672
Effect of dilutive shares:
Options to purchase common stock		2,165,808		1,979,474		954,056
Common warrants		—		378,282		177,257
Restricted stock		152,233		117,731		47,630

Diluted number of weighted-average shares outstanding		36,877,599		35,666,575		33,341,615


Diluted net income per share	$	0.38	$	0.10	$	0.01

Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share are as follows:

	Year ended December 31,
	2014		2013		2012
Options to purchase common stock		—		—		1,209,748
Unvested restricted stock		90,792		432,272		559,551
Convertible debt		2,743,321		—		—

Total		2,834,113		432,272		1,769,299

- Definition

The entire disclosure for earnings per share.

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