12. Net Income Per Share

We utilize the two-class method to compute net income per share.  The two-class method allocates a portion of netincome to participating securities, which includes unvested awards of share-based payments with non-forfeitable rights toreceive dividends.  Net income allocated to unvested share-based payments is excluded from net income allocated to commonshares.  Any undistributed losses resulting from dividends exceeding net income are not allocated to participating securities.We declared special dividends of $2.00 per share in 2014 and $1.00 per share in 2012. As a result, dividends exceeded earningsin both periods, which resulted in decreased earnings per share of $0.05 per share in 2014 and $0.01 per share in 2012. Basicnet income per share is computed by dividing net income allocated to common shares by the weighted average number ofcommon shares outstanding during the period.  Diluted net income per share is computed by dividing net income allocated tocommon shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect ofoutstanding stock options.

The following table summarizes the net income allocated to common shares and the basic and diluted shares used inthe net income per share computations:

Year ended December 31,2014 2013 2012

(in thousands)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,004 $ 32,032 $ 40,402Less distributed and undistributed earnings allocated to participating securities. . . (2,002) (916) (1,224)Net income allocated to common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,002 $ 31,116 $ 39,178

Weighted average common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,708 24,850 25,007Incremental shares from assumed conversions of common stock options . . . . . . . . 4 22 60Adjusted weighted average common shares outstanding . . . . . . . . . . . . . . . . . . . . . 24,712 24,872 25,067

Potentially dilutive securities not included in weighted average share calculation due to anti-dilutive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8 29

F-26

13. Leases

We lease various office facilities, equipment and vehicles under operating lease arrangements, some of which containrent escalation clauses.  Most of the leases contain purchase and/or renewal options at fair market and fair rental value,respectively.  Rental expense relating to all operating leases was $13.4 million, $13.9 million and $13.8 million in 2014, 2013and 2012, respectively.  At December 31, 2014, future minimum rental payments under noncancelable operating leases are asfollows:

OperatingLeases

(in thousands)2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,3642016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,8212017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,5342018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,8222019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,189Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,312

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,042