Net Income per Share

ASC 260, Earnings per share, requires the use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock.

The table below presents basic and diluted net (loss) income per share of common stock using the two-class method for the three and nine months ended September 30, 2017 and September 30, 2016:



	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016
Numerator:
Net income	$	68,356		$	69,893		$	151,714		$	98,849
Preferred dividends	(11,148		)	(9,310		)	(29,768		)	(20,985		)
Net income available to common stockholders	57,208			60,583			121,946			77,864
Dividends declared on common stock	(48,507		)	(37,180		)	(139,155		)	(99,182		)
Dividends on participating securities	(625		)	(413		)	(1,884		)	(1,298		)
Net income (loss) attributable to common stockholders	$	8,076		$	22,990		$	(19,093	)	$	(22,616	)
Denominator:
Basic weighted average shares of common stock outstanding	105,446,704			71,919,549			97,546,437			68,913,362
Diluted weighted average shares of common stock outstanding	106,812,721			72,861,611			98,919,689			69,865,603
Basic and diluted net income per weighted average share of common stock
Distributable Earnings	$	0.46		$	0.52		$	1.43		$	1.44
Undistributed income (loss)	$	0.08		$	0.31		$	(0.20	)	$	(0.33	)
Basic and diluted net income per share of common stock	$	0.54		$	0.83		$	1.23		$	1.11

For the three and nine months ended September 30, 2017, 1,366,016 and 1,373,252 unvested RSUs, respectively, were excluded from the calculation of diluted net income per share because the effect was anti-dilutive. For the three and nine months ended September 30, 2016, 942,062 and 952,241 unvested RSUs, respectively, were excluded from the calculation of diluted net income per share because the effect was anti-dilutive.