Earnings Per Share

3 Months Ended

Mar. 31, 2016

Note 4—Earnings Per Share

The Company grants restricted share units which entitle the recipients to receive dividend equivalents during the vesting period on a basis equivalent to the dividends paid to holders of common shares. Unvested share-based compensation awards containing non-forfeitable rights to receive dividends or dividend equivalents (collectively, “dividends”) are classified as “participating securities” and are included in the basic earnings per share calculation using the two-class method.

Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities, based on their respective rights to receive dividends. Basic earnings per share is determined by dividing net income, reduced by income attributable to the participating securities, by the weighted-average common shares outstanding during the period.

Diluted earnings per share is determined by dividing net income attributable to diluted shareholders, which adds back to net income the interest expense, net of applicable income taxes, on the Company’s exchangeable senior notes (the “Exchangeable Notes”), by the weighted-average common shares outstanding, assuming all potentially dilutive securities were issued. In periods in which the Company records a loss, potentially dilutive securities are excluded from the diluted loss per share calculation, as their effect on loss per share is anti-dilutive.

The following table summarizes the basic and diluted earnings per share calculations:


	Quarter ended March 31,
	2016			2015
	(in thousands except per share amounts)
Basic earnings per share:
Net income	$	14,496		$	7,508
Effect of participating securities—share-based compensation awards		(412	)		(576	)

Net income attributable to common shareholders	$	14,084		$	6,932

Diluted earnings per share:
Net income attributable to common shareholders	$	14,084		$	7,508
Effect of participating securities—share-based compensation awards		—			(576	)
Interest on Exchangeable Notes, net of income taxes		—			—

Net income attributable to diluted shareholders	$	14,084		$	6,932

Weighted-average basic shares outstanding		71,884			74,528
Potentially dilutive securities:
Shares issuable under share-based compensation plan		—			428
Shares issuable pursuant to exchange of the Exchangeable Notes		—			—

Diluted weighted-average number of shares outstanding		71,884			74,956

Basic earnings per share	$	0.20		$	0.09

Diluted earnings per share	$	0.20		$	0.09

Dividends and undistributed earnings allocated to participating securities under the basic and diluted earnings per share calculations require specific shares to be included or excluded that may differ in certain circumstances.

The following table summarizes the common shares excluded from the diluted earnings per share calculation for the periods as inclusion of such shares would have been antidilutive:


	Quarter ended March 31,
	2016		2015
	(in thousands)
Shares issuable under share-based compensation awards		1,171		—
Shares issuable pursuant to exchange of the Exchangeable Notes		8,467		8,433