Net Income per Share

3 Months Ended

Mar. 31, 2023

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 months ended March 31, 2023 and 2022 ($ in thousands except per share data):


	Three months ended March 31,
		2023		2022
Basic Earnings
Net income		$	48,916	$	15,238
Less: Preferred dividends		(3,068)		(3,068)
Net income available to common stockholders		$	45,848	$	12,170
Less: Dividends on participating securities		(1,003)		(899)
Basic Earnings		$	44,845	$	11,271

Diluted Earnings
Basic Earnings		$	44,845	$	11,271
Add: Dividends on participating securities		1,003		—
Add: Interest expense on Convertible Notes		3,445		—
Diluted Earnings		$	49,293	$	11,271

Number of Shares:
Basic weighted-average shares of common stock outstanding		141,072,471		140,353,386
Diluted weighted-average shares of common stock outstanding		155,483,979		140,353,386

Earnings Per Share Attributable to Common Stockholders
Basic		$	0.32	$	0.08
Diluted		$	0.32	$	0.08

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 months ended March 31, 2023, 11,189,949 weighted-average potentially issuable shares with respect to the Convertible Notes were included in the dilutive earnings per share denominator because the effect was dilutive. For the three months ended March 31, 2022, 28,533,271 weighted-average potentially issuable shares with respect to the Convertible Notes were excluded in the dilutive earnings per share denominator because the effect was anti-dilutive. Refer to "Note 10 - Convertible Senior Notes, Net" for further discussion.

For the three months ended March 31, 2023, 3,221,559 weighted-average unvested RSUs were included in the calculation of diluted net income per share because the effect was dilutive. For the three months ended March 31, 2022, 2,571,417 weighted-average unvested RSUs, were excluded in the calculation of diluted net income per share because the effect was anti-dilutive.