Earnings Per Share and Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Earnings Per Share and Stockholders' Equity

Earnings Per Share

The following table sets forth the computation of earnings per common share and earnings per common share—assuming dilution:



	Year Ended December 31,
	2016		2015		2014
	(Dollars in thousands, except per share data)
Numerator:
Net income—numerator for earnings per common share	$	83,243	$	219,830	$	126,023

Denominator:
Weighted average common shares outstanding (1)	84,793,151		78,936,828		74,431,087
Effect of dilutive securities:
Convertible senior notes	—		—		2,657,158
Equity forward sale agreements	—		67,575		—
2015 warrants	15,136		759,723		1,559,646
Stock options and deferred compensation agreements	456,236		1,040,922		1,178,783
Restricted stock and restricted stock units	340,646		155,520		66,926
Denominator for earnings per common share—assuming dilution	85,605,169		80,960,568		79,893,600

Earnings per common share	$	0.98	$	2.78	$	1.69
Earnings per common share—assuming dilution	$	0.97	$	2.72	$	1.58


(1)	Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP.

Options to purchase shares of our common stock that were outstanding during the respective periods indicated but were not included in the computation of diluted earnings per share because the options' exercise price was greater than the average market price of the common shares are as follows:



Period	Number of Shares	Range of Exercise Prices
		Minimum	Maximum
Year ended December 31, 2016	1,054,091	$24.79	$24.79
Year ended December 31, 2015	1,061,541	$24.79	$24.79
Year ended December 31, 2014	1,215,450	$24.79	$24.79

Stockholders' Equity

In August 2015, we completed an underwritten public offering of 8,600,000 shares of our common stock at a public offering price of $25.25 per share, of which 4,300,000 shares were subject to a forward sale agreement. The underwriters exercised in full their option to purchase 1,290,000 additional shares of common stock, which were subject to a separate forward sale agreement. We settled the forward sale agreements on August 1, 2016 and issued 5,590,000 shares of our common stock and received $134.7 million in net proceeds. We contributed the net proceeds from the settlement to the capital and surplus of American Equity Life.

The forward sale agreements had no initial fair value since they were entered into at the then market price of the common stock. The forward sale agreements were equity instruments and qualified for an exception from derivative and fair value accounting.