Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2024

ASC 260, "Earnings per share" requires the use of the two-class method of computing earnings (loss) per share for all periods presented for each class of common stock and participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities according to their respective rights to

receive dividends. The unvested RSUs granted under our 2019 Equity Incentive Plan to certain employees of the Manager qualify as participating securities as RSUs have non-forfeitable rights to participate in dividends. Therefore, unvested RSUs are included in the calculation of basic earnings per share.

For the three months ended March 31, 2024, the dilutive effect to earnings per share was determined using the two-class method because it was more dilutive than the treasury stock method. Dilutive earnings per share is calculated under the more dilutive computation of the two-class method and the treasury stock method, or if-converted method in periods with convertible interest expense. Under the treasury stock method, the denominator includes the weighted-average outstanding common shares plus the incremental shares related to participating securities. The incremental shares are determined by subtracting the average unrecognized compensation cost for the period divided by the average stock price from the unvested RSUs.

For the three months ended March 31, 2023, the dilutive effect to earnings per share was determined using the "if-converted" method whereby interest expense on the outstanding Convertible Notes was added back to the diluted earnings per share numerator, and all of the potentially dilutive shares were included in the diluted earnings per share denominator. The denominator included all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator was 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 (loss) per share of common stock for the three months ended March 31, 2024 and 2023 ($ in thousands except per share data):


	Three months ended March 31,
Basic Earnings		2024		2023
Net income (loss)		$	(104,524)	$	48,916
Less: Preferred dividends		(3,068)		(3,068)
Less: Earnings attributable to participating securities		—		—
Less: Dividends on participating securities		(886)		(1,003)
Basic Earnings (Loss)		$	(108,478)	$	44,845

Dilutive Earnings
Basic Earnings (Loss)		$	(108,478)	$	44,845
Add: Dividends on participating securities		—		1,003
Add: Interest expense on Convertible Notes		—		3,445
Diluted Earnings (Loss)		$	(108,478)	$	49,293

Number of Shares:
Basic weighted-average shares of common stock outstanding		141,869,604		141,072,471
Diluted weighted-average shares of common stock outstanding		141,869,604		155,483,979

Earnings (Loss) Per Share Attributable to Common Stockholders
Basic		$	(0.76)	$	0.32
Diluted		$	(0.76)	$	0.32

For the three months ended March 31, 2024, 423,784 incremental shares were excluded in the calculation of diluted net income per share because the effect was anti-dilutive. 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, 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. Refer to "Note 10 - Convertible Senior Notes, Net" for further discussion.