(4) Earnings per Share

The Company reports its earnings per share under the two-class method. Under this method, potentially dilutive securities are excluded from the calculation of diluted earnings per share (as well as their related impact on the net income available to common stockholders) when their impact on net income available to common stockholders is anti-dilutive. Potentially dilutive securities for the three and nine months ended September 30, 2016 and 2015 included all outstanding stock options, RSAs, and RSUs, which were included in the calculation of diluted earnings per share for these periods, if dilutive. The potentially dilutive effect of outstanding warrants and the underlying shares exercisable under the Company’s $287.5 million of 1.00% Convertible Senior Notes due 2020 (the “Convertible Notes”) were excluded from diluted shares outstanding because the exercise price exceeded the average market price of the Company’s common stock. The effect of the note hedge the Company purchased to offset the underlying conversion option embedded in the Convertible Notes was also excluded, as the effect is anti-dilutive.

Additionally, the shares of restricted stock issued by the Company under RSAs have a non-forfeitable right to cash dividends, if and when declared by the Company. Accordingly, restricted shares issued under RSAs are considered to be participating securities and, as such, the Company has allocated the undistributed earnings for the three and nine months ended September 30, 2016 and 2015 among the Company’s outstanding shares of common stock and issued but unvested restricted shares, as follows:

Earnings per Share (in thousands, excluding share and per share amounts)


	Three Months Ended					Three Months Ended
	September 30, 2016					September 30, 2015
	Income		Weighted Average Shares Outstanding	Earnings per Share		Income		Weighted Average Shares Outstanding	Earnings per Share
Basic:
Net income attributable to controlling interests and available to common stockholders	$	27,490				$	22,009
Less: Undistributed earnings allocated to unvested RSAs		(9)					(28)
Net income available to common stockholders	$	27,481	45,252,869	$	0.61	$	21,981	44,833,117	$	0.49

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	9				$	28
Stock options added to the denominator under the treasury stock method			20,557					60,693
RSUs added to the denominator under the treasury stock method			576,635					497,857
Less: Undistributed earnings reallocated to RSAs		(9)					(27)
Net income available to common stockholders and assumed conversions	$	27,481	45,850,061	$	0.60	$	21,982	45,391,667	$	0.48


	Nine Months Ended					Nine Months Ended
	September 30, 2016					September 30, 2015
	Income		Weighted Average Shares Outstanding	Earnings per Share		Income		Weighted Average Shares Outstanding	Earnings per Share
Basic:
Net income attributable to controlling interests and available to common stockholders	$	63,022				$	52,239
Less: Undistributed earnings allocated to unvested RSAs		(34)					(79)
Net income available to common stockholders	$	62,988	45,175,604	$	1.39	$	52,160	44,769,661	$	1.17

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	34				$	79
Stock options added to the denominator under the treasury stock method			29,451					68,245
RSUs added to the denominator under the treasury stock method			560,180					485,878
Less: Undistributed earnings reallocated to RSAs		(33)					(78)
Net income available to common stockholders and assumed conversions	$	62,989	45,765,235	$	1.38	$	52,161	45,323,784	$	1.15

The computation of diluted earnings per share excluded potentially dilutive common shares related to restricted stock issued by the Company under RSAs of 7,217 and 12,920 shares for the three and nine months ended September 30, 2016, respectively, and 27,052 and 32,106 for the three and nine months ended September 30, 2015, respectively, because the effect of including these shares in the computation would have been anti-dilutive.