The Company applies the two-class method for computing and presenting earnings per share since the Company’s unvested restricted stock awards represent participating securities due to the right to share in dividends, if declared, equally with common stockholders. The two-class method allocates current period net income to common stock and participating securities based on (i) dividends declared and (ii) participation rights in the remaining undistributed income. For a majority-owned subsidiary, the Company’s proportionate share in that majority-owned subsidiary’s earnings per share is added to the computation of earnings per share on a consolidated basis.

Basic earnings per share is computed by dividing income attributable to common stockholders using the two-class method by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share gives effect to all securities having a dilutive effect on income attributable to common stockholders, weighted-average shares of common stock outstanding, or both. The effect from dilutive securities included, but was not limited to: (i) incremental shares of common stock calculated using the if-converted method for convertible debt instruments; (ii) incremental shares of common stock calculated using the treasury stock method for warrants and share-based compensation awards; (iii) adjustments to a majority-owned subsidiary's earnings per share due to its dilutive securities; and (iv) the corresponding impact to income attributable to common stockholders associated with the preceding considerations. Net losses are not allocated to participating securities as the participating securities do not have a contractual obligation to share in losses.

The computations of basic and diluted earnings per share for the periods presented were as follows:


	Three Months Ended							Three Months Ended
	June 30, 2026							June 30, 2025
	Income			Shares (a)		Per Share		Income			Shares (a)		Per Share
	(Numerator)			(Denominator)		Amount		(Numerator)			(Denominator)		Amount
Net income	$	82,900						$	70,279
Less: Net income attributable to noncontrolling interests		(9,103	)						(4,119	)
Net income after noncontrolling interests		73,797							66,160
Less: Income attributable to participating securities		(2,925	)						(2,616	)
Basic Earnings Per Share:
Income attributable to common stockholders		70,872			12,269	$	5.78		63,544			11,400	$	5.57
Effect of Dilutive Securities:
Stock options		—			382				—			392
Convertible senior notes		—			—				3,170			1,084
Warrants		—			7				—			7
Net impact from reallocation of undistributed earnings to participating securities		65			—				—			—
Diluted Earnings Per Share:
Income attributable to common stockholders	$	70,937			12,658	$	5.60	$	66,714			12,883	$	5.18

(a)

Shares in thousands.


	Six Months Ended							Six Months Ended
	June 30, 2026							June 30, 2025
	Income			Shares (a)		Per Share		Income			Shares (a)		Per Share
	(Numerator)			(Denominator)		Amount		(Numerator)			(Denominator)		Amount
Net income	$	167,943						$	144,509
Less: Net income attributable to noncontrolling interests		(20,739	)						(8,665	)
Net income after noncontrolling interests		147,204							135,844
Less: Income attributable to participating securities		(6,186	)						(5,691	)
Basic Earnings Per Share:
Income attributable to common stockholders		141,018			12,379	$	11.39		130,153			10,846	$	12.00
Effect of Dilutive Securities:
Stock options		—			390				—			373
Convertible senior notes		—			—				5,500			1,611
Warrants		—			7				—			7
Net impact from reallocation of undistributed earnings to participating securities		143			—				—			—
Diluted Earnings Per Share:
Income attributable to common stockholders	$	141,161			12,776	$	11.05	$	135,653			12,837	$	10.57

(a)

Shares in thousands.

For the periods presented, all dilutive securities for Exzeo were excluded from Exzeo's diluted earnings per share computation because their (i) effect would be anti-dilutive, (ii) exercise prices were out-of-the-money, or (iii) contingent exercise conditions were unsatisfied.