Net Income Per Share

9 Months Ended

Sep. 30, 2022

Net Income Per Share

Net Income Per Share

8. Net Income Per Share

Grants of restricted stock and restricted stock units (“RSUs”) of the Company in share-based payment transactions are considered participating securities prior to vesting and, therefore, are considered in computing basic earnings per share under the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. Earnings per basic share under the two-class method is calculated based on dividends declared on common shares and other participating securities (“distributed earnings”) and the rights of participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends accruing during the period. The undistributed earnings are allocated to all outstanding common shares and participating securities based on the relative percentage of each security to the total number of outstanding participating securities. Earnings per basic share represents the summation of the distributed and undistributed earnings per share class divided by the total number of shares.

Through September 30, 2022, all of the Company’s participating securities received dividends or dividend equivalents at an equal dividend rate per share or unit. As a result, distributions to participating securities for the three and nine months ended September 30, 2022 and 2021 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share.

The 100,799 and 235,753 shares necessary to settle the Exchangeable Senior Notes on the if-exchanged method basis were dilutive for the three and nine months ended September 30, 2022, respectively, and were included in the computation of diluted earnings per share. The 2,193,492 shares necessary to settle the Exchangeable Senior Notes on the if-exchanged method basis were dilutive for the three and nine months ended September 30, 2021, and were included in the computation of diluted earnings per share.

For the three and nine months ended September 30, 2022, the performance share units (“PSUs”) granted to certain employees were not included in dilutive securities as the performance thresholds for vesting of the PSUs were not met as measured as of September 30, 2022. For the three and nine months ended September 30, 2021, 78,582 shares issuable upon vesting of PSUs granted to certain employees in January 2021 were included in dilutive securities, as the performance thresholds for the vesting of these PSUs were met as measured as of September 30, 2021 (see Note 10 for further discussion of PSUs).

Computations of net income per basic and diluted share (in thousands, except share and per share data) were as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	37,616	$	30,094	$	112,880	$	85,360
Preferred stock dividends		(338)		(338)		(1,014)		(1,014)
Distribution to participating securities		(213)		(147)		(622)		(410)
Net income attributable to common stockholders used to compute net income per share - basic		37,065		29,609		111,244		83,936
Dilutive effect of Exchangeable Senior Notes		72		1,885		474		5,636
Net income attributable to common stockholders used to compute net income per share - diluted	$	37,137	$	31,494	$	111,718	$	89,572
Weighted-average common shares outstanding:
Basic		27,938,568		23,890,537		27,144,953		23,889,903
Restricted stock and RSUs		118,567		98,093		115,445		95,527
PSUs		—		78,582		—		78,582
Dilutive effect of Exchangeable Senior Notes		100,799		2,193,492		235,753		2,193,492
Diluted		28,157,934		26,260,704		27,496,151		26,257,504
Net income attributable to common stockholders per share:
Basic	$	1.33	$	1.24	$	4.10	$	3.51
Diluted	$	1.32	$	1.20	$	4.06	$	3.41