Common Stock and Earnings (Loss) Per Share

Common Stock Issuance

In October 2012, the Company issued 6,900,000 shares as part of an offering, which generated net proceeds of $276.1 million after deducting underwriting discounts and commissions and offering expenses. The Company used $95.0 million of these net proceeds to partially fund its acquisition of RMS. In November 2012, the Company issued 891,265 shares to partially fund the acquisition of RMS.

Dividends on Common Stock

The decision to declare and pay dividends is made at the discretion of the Company’s Board of Directors and will depend on, among other things, results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Company’s Board of Directors may deem relevant.

Many of the Company’s subsidiaries are subject to restrictions on their ability to pay dividends or otherwise transfer funds to other consolidated subsidiaries and, ultimately, to Walter Investment Management Corp., the Parent Company. These restrictions include, but are not limited to, minimum levels of net worth and other financial requirements imposed by GSEs, Ginnie Mae and other licensing requirements. The aggregate restricted net assets of these subsidiaries was $798.8 million at December 31, 2014; however, the restrictions on the net assets of these subsidiaries do not directly limit the ability to pay dividends from consolidated retained earnings.

In addition, the Company’s ability to pay dividends is limited by conditions set forth in the agreements governing the 2013 Secured Credit Facilities and the Senior Notes.

Earnings (Loss) Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations shown on the consolidated statements of comprehensive income (loss) (in thousands, except per share data):



	For the Years Ended December 31,
	2014			2013			2012
Basic earnings (loss) per share
Net income (loss)	$	(110,328	)	$	253,467		$	(22,134	)
Less: Net income allocated to unvested participating securities	—			(3,719		)	—
Net income (loss) available to common stockholders (numerator)	$	(110,328	)	$	249,748		$	(22,134	)

Weighted-average common shares outstanding (denominator)	37,631			37,003			30,397

Basic earnings (loss) per share	$	(2.93	)	$	6.75		$	(0.73	)

Diluted earnings (loss) per share
Net income (loss)	$	(110,328	)	$	253,467		$	(22,134	)
Less: Net income allocated to unvested participating securities	—			(3,651		)	—
Net income (loss) available to common stockholders (numerator)	$	(110,328	)	$	249,816		$	(22,134	)

Weighted-average common shares outstanding	37,631			37,003			30,397
Add: Effect of dilutive stock options, non-participating securities, and convertible notes	—			698			—
Diluted weighted-average common shares outstanding (denominator)	37,631			37,701			30,397

Diluted earnings (loss) per share	$	(2.93	)	$	6.63		$	(0.73	)

A portion of the Company’s unvested RSUs are considered participating securities. During periods of net income, the calculation of earnings per share for common stock is adjusted to exclude the income attributable to the participating securities from the numerator and exclude the dilutive impact of those shares from the denominator. During periods of net loss, as was the case for the years ended December 31, 2014 and 2012, no effect is given to the participating securities because they do not share in the losses of the Company.

The calculation of diluted earnings (loss) per share does not include 7.5 million, 5.9 million and 6.9 million shares for the years ended December 31, 2014, 2013 and 2012, respectively, because their effect would have been antidilutive. The Convertible Notes are antidilutive when calculating earnings (loss) per share when the Company's average stock price is less than $58.80. Upon conversion of the Convertible Notes, the Company may pay or deliver, at its option, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock. It is the Company’s intent to settle all conversions through combination settlement, which involves repayment of an amount of cash equal to the principal amount and any excess of conversion value over the principal amount in shares of common stock.