(4) Earnings per Share

The Company reports its earnings per share under the two-class method. Under this method, potentially dilutive securities are excluded from the calculation of diluted earnings per share (as well as their related impact on the net income available to common stockholders) when their impact on net income available to common stockholders is anti-dilutive. Potentially dilutive securities for the three and six months ended June 30, 2014 and 2013 included all outstanding stock options and shares of restricted stock, which were included in the calculation of diluted earnings per share for these periods. The potentially dilutive effect of outstanding warrants and the underlying shares exercisable under the Company’s convertible notes were excluded from diluted shares outstanding because the exercise price exceeded the average market price of the Company’s common stock. The effect of the note hedge the Company purchased to offset the underlying conversion option embedded in its convertible notes was also excluded, as the effect is anti-dilutive.

Additionally, the shares of restricted stock issued by the Company under RSAs have a non-forfeitable right to cash dividends, if and when declared by the Company. Accordingly, restricted shares issued under RSAs are considered to be participating securities and, as such, the Company has allocated the undistributed earnings for the three and six months ended June 30, 2014 and 2013 among the Company's outstanding shares of common stock and issued but unvested restricted shares, as follows:

Earnings per Share (in thousands, excluding share and per share amounts):



	Three Months Ended June 30, 2014						Three Months Ended June 30, 2013
	Income		Weighted Average Shares Outstanding		Earnings Per Share		Income		Weighted Average Shares Outstanding		Earnings Per Share
Basic:
Net income attributable to controlling interests and available to common stockholders	$	13,989					$	15,327
Less: Undistributed earnings allocated to unvested RSAs		(49)						(448)
Net income available to common stockholders	$	13,940		44,324,747	$	0.31	$	14,879		44,394,230	$	0.34
Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	49					$	448
Stock options added to the denominator under the treasury stock method				125,207						220,791
RSUs added to the denominator under the treasury stock method				381,024						—
Less: Undistributed earnings reallocated to RSAs		(49)						(445)
Net income available to common stockholders and assumed conversions	$	13,940		44,830,978	$	0.31	$	14,882		44,615,021	$	0.33



	Six Months Ended June 30, 2014						Six Months Ended June 30, 2013
	Income		Weighted Average Shares Outstanding		Earnings Per Share		Income		Weighted Average Shares Outstanding		Earnings Per Share
Basic:
Net income attributable to controlling interests and available to common stockholders	$	23,554					$	24,757
Less: Undistributed earnings allocated to unvested restricted shares		(102)						(666)
Net income available to common stockholders	$	23,452		44,270,363	$	0.53	$	24,091		44,321,069	$	0.54

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	102					$	666
Stock options added to the denominator under the treasury stock method				130,562						226,782
RSUs added to the denominator under the treasury stock method				399,373						—
Less: Undistributed earnings reallocated to restricted shares		(100)						(662)
Net income available to common stockholders and assumed conversions	$	23,454		44,800,298	$	0.52	$	24,095		44,547,851	$	0.54

The computation of diluted earnings per share excluded potentially dilutive common shares related to restricted stock of 61,031 and 80,298 shares for the three and six months ended June 30, 2014, respectively, and 454,918 and 466,152 shares for the three and six months ended June 30, 2013, respectively, because the effect of including these shares in the computation would have been anti-dilutive.