Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings per Share

Reconciliation of net income from continuing operations and the number of shares of common stock used in the computation of basic EPS and diluted EPS

The following table provides a reconciliation of net income and the number of shares of common stock used in the computation of basic EPS and diluted EPS (amounts in thousands, except per share amounts):

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Basic Earnings
Income attributable to STWD common stockholders	$	127,016	$	109,230	$	197,399	$	209,162
Less: Income attributable to participating shares not already deducted as non-controlling interests		(751)		(1,034)		(1,575)		(1,755)
Basic earnings	$	126,265	$	108,196	$	195,824	$	207,407
Diluted Earnings
Income attributable to STWD common stockholders	$	127,016	$	109,230	$	197,399	$	209,162
Less: Income attributable to participating shares not already deducted as non-controlling interests		(751)		(1,034)		(1,575)		(1,755)
Add: Interest expense on Convertible Notes (1)		3,049		7,593		6,235		15,159
Diluted earnings	$	129,314	$	115,789	$	202,059	$	222,566
Number of Shares:
Basic — Average shares outstanding		279,239		260,998		278,396		260,832
Effect of dilutive securities — Convertible Notes (1)		9,649		27,134		9,963		27,044
Effect of dilutive securities — Contingently issuable shares		—		128		—		128
Effect of dilutive securities — Unvested non-participating shares		184		50		170		36
Diluted — Average shares outstanding		289,072		288,310		288,529		288,040
Earnings Per Share Attributable to STWD Common Stockholders:
Basic	$	0.45	$	0.41	$	0.70	$	0.80
Diluted	$	0.45	$	0.40	$	0.70	$	0.77

(1) Prior to June 30, 2018, the Company had asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. Accordingly, under GAAP, the dilutive effect to EPS was previously determined using the treasury stock method by dividing only the “conversion spread value” of the “in-the-money” Convertible Notes by the Company’s average share price and including the resulting share amount in the diluted EPS denominator. The conversion value of the principal amount of the Convertible Notes was not included. Effective June 30, 2018, the Company no longer asserts its intent to fully settle the principal amount of the Convertible Notes in cash upon conversion. Accordingly, under GAAP, the dilutive effect to EPS for the periods presented above is determined using the “if-converted” method whereby interest expense or any loss on extinguishment of our Convertible Notes is added back to the diluted EPS numerator and the full number of potential shares contingently issuable upon their conversion is included in the diluted EPS denominator, if dilutive. Refer to Note 10 for further discussion.