Net Income per Share

6 Months Ended

Jun. 30, 2019

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 the computation of basic and diluted net income per share of common stock for the three and six months ended June 30, 2019 and 2018 ($ in thousands except per share data):



	For the three months ended June 30,						For the six months ended June 30,
	2019			2018			2019			2018
Basic Earnings
Net Income	$	61,424		$	55,346		$	129,182		$	104,779
Less: Preferred dividends	(4,919		)	(6,834		)	(11,754		)	(13,669		)
Net income available to common stockholders	$	56,505		$	48,512		$	117,428		$	91,110
Less: Dividends on participating securities	(849		)	(738		)	(1,700		)	(1,489		)
Basic Earnings	$	55,656		$	47,774		$	115,728		$	89,621

Diluted Earnings
Net Income	$	61,424		$	55,346		$	129,182		$	104,779
Less: Preferred dividends	(4,919		)	(6,834		)	(11,754		)	(13,669		)
Net income available to common stockholders	$	56,505		$	48,512		$	117,428		$	91,110
Add: Interest expense on Notes	8,619			N/A			17,881			N/A
Diluted Earnings	$	65,124		$	48,512		$	135,309		$	91,110

Number of Shares:
Basic weighted-average shares of common stock outstanding	145,567,963			123,019,993			140,117,813			116,651,305
Diluted weighted-average shares of common stock outstanding	174,101,234			124,629,317			169,418,177			118,281,153

Earnings Per Share Attributable to Common Stockholders
Basic	$	0.38		$	0.39		$	0.83		$	0.78
Diluted	$	0.37		$	0.39		$	0.80		$	0.78

Prior to the three months ended September 30, 2018, we asserted our intent and ability to settle the principal amount of the Notes in cash and, as a result, the Notes did not have any impact on our diluted earnings per share. As of September 30, 2018, we no longer asserted our intent to fully settle the principal amount of the Notes in cash upon conversion. Accordingly, the dilutive effect to earnings per share for the current year periods is determined using the "if-converted" method whereby interest expense on the outstanding Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three and six months ended June 30, 2019, 28,533,271 and 29,300,363 weighted-average potentially issuable shares from the Notes were included in the dilutive earnings per share denominator, respectively. Refer to "Note 9 - Convertible Senior Notes, Net" for further discussion.

For the three and six months ended June 30, 2019, 1,846,173 and 1,847,860 weighted-average unvested RSUs, respectively, were excluded from the calculation of diluted net income per share because the effect was anti-dilutive as compared to 1,609,324 and 1,629,848 for the same periods in the prior year.