Note 12. Earnings Per Share

In connection with our IPO, Queso converted into a Delaware corporation and all of its 1,028,000 outstanding limited partnership units were converted on a 1-for-33.858 basis into an aggregate of 34,805,541 shares of our common stock. Additionally, all of the outstanding shares of the University’s common stock owned by persons other than the Company were converted into shares of the Company’s common stock at a ratio equal to one share of the Company’s common stock for each share of the University’s common stock. As a result, we issued 790,714 shares of the Company’s common stock upon the conversion of 790,714 outstanding shares of the University’s common stock, and the University is now an indirect wholly-owned subsidiary of the Company. Further, with respect to the University’s outstanding share-based awards, we will issue shares of the Company’s common stock on a 1-for-1 basis upon the vesting of outstanding restricted stock units. Upon the future exercise of outstanding University stock options, we may, at our election, either repurchase such options for cash, in which case no shares of University or Company common stock would be issued, or issue shares of the Company’s common stock on a 1-for-1 basis in exchange for the shares of University common stock that would have been received upon exercise. We have applied retrospective presentation to our earnings per share for all periods presented in our financial statements such that weighted average shares outstanding reflects these conversions resulting from the IPO.

We calculate earnings per share by dividing net income attributable to Phoenix Education Partners, Inc. by the weighted average shares outstanding. For diluted weighted average shares outstanding, we calculate the dilutive effect of share-based awards by applying the treasury stock method.