Note 22 – Earnings per share of common stock

The following table provides information on the basic and diluted earnings per share computations, including the number of shares of common stock used for purposes of these computations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, except for share and per share amounts)	2019		2018		2019		2018
Basic Earnings
Net income	$	12,427	$	17,569	$	54,120	$	51,971
Less: Income attributable to non-controlling interest		323		638		1,580		1,890
Less: Income attributable to participating shares		79		50		240		162
Basic earnings	$	12,025	$	16,881	$	52,300	$	49,919

Diluted Earnings
Net income	$	12,427	$	17,569	$	54,120	$	51,971
Less: Income attributable to non-controlling interest		323		638		1,580		1,890
Less: Income attributable to participating shares		79		50		240		162
Diluted earnings	$	12,025	$	16,881	$	52,300	$	49,919


Number of Shares
Basic — Average shares outstanding		44,438,652		32,109,642		40,517,231		32,073,665
Effect of dilutive securities — Unvested participating shares		29,149		20,620		29,149		16,461
Diluted — Average shares outstanding		44,467,801		32,130,262		40,546,380		32,090,126

Earnings Per Share Attributable to RC Common Stockholders:
Basic	$	0.27	$	0.53	$	1.29	$	1.57
Diluted	$	0.27	$	0.53		1.29		1.57

Participating unvested RSUs were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above.

Additionally, as of September 30, 2019, there are potential shares of common stock contingently issuable upon the conversion of the Convertible Notes in the future. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. Based on this assessment, the Company determined that it would be appropriate to apply a method similar to the treasury stock method, such that contingently issuable common stock is assessed quarterly along with our other potentially dilutive instruments. In order to compute the dilutive effect, the number of shares included in the denominator of diluted EPS is determined by dividing the “conversion spread value” of the share-settled portion (value above accreted value of face value and interest component) of the instrument by the share price. The “conversion spread value” is the value that would be delivered to investors in shares based on the terms of the bond upon an assumed conversion. As of September 30, 2019, the conversion spread value is currently zero, since the closing price of our common stock does not exceed the conversion rate (strike price) and is “out-of-the-money”, resulting in no impact on diluted EPS.

Certain investors own OP units in our operating partnership. An OP unit and a share of common stock of the Company have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the operating partnership. OP unit holders have the right to redeem their OP units, subject to certain restrictions. The redemption is required to be satisfied in shares of common stock or cash at the Company's option, calculated as follows: one share of the Company's common stock, or cash equal to the fair value of a share of the Company's common stock at the time of redemption, for each OP unit. When an OP unit holder redeems an OP unit, non-controlling interests in the operating partnership is reduced and the Company's equity is increased. At September 30, 2019 and December 31, 2018, the non-controlling interest OP unit holders owned 1,117,169 OP units.