Net Income (Loss) per Share

12 Months Ended

Dec. 31, 2011

Net Income (Loss) per Share

Net Income (Loss) per Share

12. Net Income (Loss) per Share

        The following table provides a reconciliation of both net income and the number of common shares used in the computation of basic and diluted income (loss) per share. We use the two-class method in calculating both basic and diluted earnings per share as our unvested restricted stock units (refer to Note 10) are participating securities as defined in GAAP (amounts in thousands except share and per share amounts):

	Year ended December 31, 2011			Year ended December 31, 2010			Period ended December 31, 2009
Net income (loss) attributable to Starwood Property Trust, Inc.	$	119,377		$	57,046		$	(3,017	)
Net income (loss) allocated to participating securities		(2,226	)		(1,388	)		(97	)
Numerator for basic and diluted net income (loss) per share	$	117,151		$	55,658		$	(3,114	)
Basic weighted average shares outstanding		84,974,604			49,138,720			47,575,634
Weighted average number of diluted shares outstanding(1)		86,409,327			50,021,824			48,540,059
Basic income (loss) per share	$	1.38		$	1.16		$	(0.06	)
Diluted income (loss) per share	$	1.38		$	1.14		$	(0.06	)

Since distributions were greater than earnings during the years ended December 31, 2011 and 2010, and the results of operations for the period ended December 31, 2009 were a net loss, each of the three periods had a net undistributed loss. As a result, diluted earnings per share would result in antidilution and therefore diluted EPS has been computed in the same manner as basic earnings per share.

(1)

The weighted average number of diluted shares outstanding includes the impact of unvested restricted stock units totaling 998,604, 1,690,810, and 964,425 as of December 31, 2011, 2010, and 2009, respectively.