Earnings per Share

9 Months Ended

Sep. 30, 2021

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 September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Basic Earnings
Income attributable to STWD common stockholders	$	128,602	$	151,834	$	356,290	$	224,721
Less: Income attributable to participating shares not already deducted as non-controlling interests	(1,635)		(1,721)		(5,351)		(3,422)
Basic earnings	$	126,967	$	150,113	$	350,939	$	221,299

Diluted Earnings
Income attributable to STWD common stockholders	$	128,602	$	151,834	$	356,290	$	224,721
Less: Income attributable to participating shares not already deducted as non-controlling interests	(1,635)		(1,721)		(5,351)		(3,422)
Add: Interest expense on Convertible Notes	2,901		3,055		8,717		*
Add: Undistributed earnings to participating shares	—		663		$	—	—
Less: Undistributed earnings reallocated to participating shares	—		(642)		$	—	—
Diluted earnings	$	129,868	$	153,189	$	359,656	$	221,299

Number of Shares:
Basic — Average shares outstanding	285,676		282,596		284,577		281,686
Effect of dilutive securities — Convertible Notes	9,649		9,649		9,649		*
Effect of dilutive securities — Contingently issuable shares	19		—		19		—
Effect of dilutive securities — Unvested non-participating shares	104		213		148		182
Diluted — Average shares outstanding	295,448		292,458		294,393		281,868

Earnings Per Share Attributable to STWD Common Stockholders:
Basic	$	0.44	$	0.53	$	1.23	$	0.79
Diluted	$	0.44	$	0.52	$	1.22	$	0.79

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*Our Convertible Notes were not dilutive for the nine months ended September 30, 2020.

As of September 30, 2021 and 2020, participating shares of 13.3 million and 12.8 million, respectively, were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above. Such participating shares at September 30, 2021 and 2020 included 9.8 million and 10.5 million potential shares, respectively, of our common stock issuable upon redemption of the Class A Units in SPT Dolphin, as discussed in Note 16.