Net Income per Share

6 Months Ended

Jun. 30, 2022

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, 2022 and 2021 ($ in thousands except per share data):


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Basic Earnings
Net income	$	70,951	$	67,691	$	86,189	$	126,026
Less: Preferred dividends	(3,068)		(3,385)		(6,136)		(6,770)
Net income available to common stockholders	$	67,883	$	64,306	$	80,053	$	119,256
Less: Dividends on participating securities	(901)		(849)		(1,800)		(1,697)
Basic Earnings	$	66,982	$	63,457	$	78,253	$	117,559

Diluted Earnings
Basic Earnings	$	66,982	$	63,457	$	78,253	$	117,559
Add: Dividends on participating securities	901		849		—		1,697
Add: Interest expense on Convertible Notes	7,464		8,261		14,924		16,506
Diluted Earnings	$	75,347	$	72,567	$	93,177	$	135,762

Number of Shares:
Basic weighted-average shares of common stock outstanding	140,590,843		139,884,060		140,472,771		139,845,178
Diluted weighted-average shares of common stock outstanding	171,698,185		170,832,186		169,006,042		170,812,544

Earnings Per Share Attributable to Common Stockholders
Basic	$	0.48	$	0.45	$	0.56	$	0.84
Diluted	$	0.44	$	0.42	$	0.55	$	0.79

The dilutive effect to earnings per share is determined using the "if-converted" method whereby interest expense on the outstanding Convertible 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, 2022 and 2021 28,533,271 weighted-average potentially issuable shares with respect to the Convertible Notes were included in the dilutive earnings per share denominator. Refer to "Note 10 - Convertible Senior Notes, Net" for further discussion.

For the three months ended June 30, 2022, 2,574,071 weighted-average unvested RSUs were included in the calculation of diluted net income per share because the effect was dilutive. For the six months ended June 30, 2022, 2,738,424 weighted-average unvested RSUs were excluded from the calculation of diluted net income per share because the effect was anti-dilutive. For the three and six months ended June 30, 2021, 2,414,855 and 2,434,095 weighted-average unvested RSUs were included in the dilutive earnings per share denominator