(4) Earnings (Losses) per Share

The Company reports its earnings (losses) 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 shareholders) when their impact on net income available to common shareholders is anti-dilutive. During the three months ended March 31, 2017, the Company incurred a net loss and, accordingly, excluded all potentially dilutive securities from the calculation of diluted earnings (losses) per share as their impact on the net loss available to common shareholders was anti-dilutive.

Potentially dilutive securities included all outstanding stock options, RSAs, and RSUs, which were included in the calculation of diluted earnings per share for the three months ended March 31, 2016. 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 for the three months ended March 31, 2016 because the exercise price exceeded the average market price of the Company’s common shares. 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. The exercise price of the Convertible Notes also exceeded the average market price of the Company’s common shares in the three months ended March 31, 2017. The restricted shares 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 months ended March 31, 2017 and 2016 among the Company’s outstanding common shares and issued but unvested restricted shares. The undistributed losses for the three months ended March 31, 2017 have not been allocated to the unvested restricted shares as they do not carry an obligation to share in losses.

Accordingly, the Company has allocated the undistributed earnings and losses for the three months ended March 31, 2017 and 2016, as follows:

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


	Three Months Ended					Three Months Ended
	March 31, 2017					March 31, 2016
	Loss		Weighted Average Shares Outstanding	Loss per Share		Income		Weighted Average Shares Outstanding	Earnings per Share
Basic:
Net (loss) income attributable to controlling interests and available to common shareholders	$	(901)				$	15,384
Less: Undistributed earnings allocated to unvested RSAs		—					(12)
Net (loss) income available to common shareholders	$	(901)	45,490,461	$	(0.02)	$	15,372	45,073,654	$	0.34

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	—				$	12
Stock options added to the denominator under the treasury stock method			—					33,691
RSUs added to the denominator under the treasury stock method			—					596,143
Less: Undistributed earnings reallocated to RSAs		—					(12)
Net (loss) income available to common shareholders and assumed conversions	$	(901)	45,490,461	$	(0.02)	$	15,372	45,703,488	$	0.34

The computation of diluted earnings per share excluded potentially dilutive common shares related to restricted shares issued by the Company under RSAs of 17,476 shares for the three months ended March 31, 2016 because the effect of including these shares in the computation would have been anti-dilutive.