(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 shareholders) when their impact on net income available to common shareholders is anti-dilutive. Potentially dilutive securities for the three and six months ended June 30, 2017 and 2016 included all outstanding stock options, RSAs, and RSUs, which were included in the calculation of diluted earnings per share for these periods. 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 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. Additionally, 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 six months ended June 30, 2017 and 2016 among the Company’s outstanding common shares 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
	June 30, 2017					June 30, 2016
	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 shareholders	$	15,158				$	20,148
Less: Undistributed earnings allocated to unvested RSAs		(2)					(10)
Net income available to common shareholders	$	15,156	45,637,778	$	0.33	$	20,138	45,199,450	$	0.45

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	2				$	10
Stock options added to the denominator under the treasury stock method			5,662					32,289
RSUs added to the denominator under the treasury stock method			578,672					516,831
Less: Undistributed earnings reallocated to RSAs		(1)					(10)
Net income available to common shareholders and assumed conversions	$	15,157	46,222,112	$	0.33	$	20,138	45,748,570	$	0.44


	Six Months Ended					Six Months Ended
	June 30, 2017					June 30, 2016
	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 shareholders	$	14,257				$	35,532
Less: Undistributed earnings allocated to unvested RSAs		(2)					(23)
Net income available to common shareholders	$	14,255	45,564,527	$	0.31	$	35,509	45,136,553	$	0.79

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	2				$	23
Stock options added to the denominator under the treasury stock method			8,290					33,073
RSUs added to the denominator under the treasury stock method			699,374					534,848
Less: Undistributed earnings reallocated to RSAs		(2)					(22)
Net income available to common shareholders and assumed conversions	$	14,255	46,272,191	$	0.31	$	35,510	45,704,474	$	0.78

The computation of diluted earnings per share excluded potentially dilutive common shares related to restricted shares issued by the Company under RSAs of 4,185 and 5,644 shares for the three and six months ended June 30, 2017, respectively, and 11,456 and 14,828 shares for the three and six months ended June 30, 2016, respectively, because the effect of including these shares in the computation would have been anti-dilutive.