NET INCOME PER COMMON SHARE

3 Months Ended

Mar. 31, 2014

NET INCOME PER COMMON SHARE [Abstract]

NET INCOME PER COMMON SHARE

NOTE 3 ¾ NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income, after deducting preferred share dividends and adjusting for the impact of unvested stock awards deemed to be participating securities, by the weighted average number of common shares outstanding, calculated excluding unvested stock awards.

Diluted net income per common share is computed by dividing net income available to common stockholders, after adding dividends on the Company’s Series A and B convertible preferred shares when such shares were dilutive, by the basic weighted average number of common shares and common share equivalents outstanding, giving effect to equity awards and these convertible preferred shares when such awards and shares were dilutive.  Prior to their redemption in June 2013, the Series A and B preferred shares were considered dilutive whenever basic net income per common share exceeded each Series’ dividend divided by the conversion rates applicable for that period.  Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock first issued in May 2013 are contingently convertible into common shares only upon the occurrence of a change in control and are therefore not presently considered dilutive securities.  Unvested stock awards that are deemed participating securities are included in the calculation of diluted net income per common share, if dilutive, under either the two-class method or the treasury stock method, depending upon which method produces the more dilutive result.

Components of the computation of basic and diluted net income per common share were as follows (dollars in thousands, except per share amounts):

	Quarter Ended March 31
	2014			2013
Basic net income per common share
Numerator for basic net income per common share:
Net income	$	38,391		$	34,918
Preferred share dividends		(3,238	)		(5,270	)
Unvested stock award participation in earnings		(24	)		(32	)
	$	35,129		$	29,616
Denominator for basic net income per common share:
Weighted average common shares outstanding		95,777			95,560
Average unvested stock awards outstanding		(428	)		(540	)
		95,349			95,020
	$	0.37		$	0.31
Diluted net income per common share
Numerator for diluted net income per common share:
Net income available to common stockholders	$	35,129		$	29,616
Dividends on dilutive convertible preferred shares		–			75
	$	35,129		$	29,691
Denominator for diluted net income per common share:
Basic weighted average common shares outstanding		95,349			95,020
Net effect of dilutive equity awards		189			121
Net effect of dilutive convertible preferred shares		–			309
		95,538			95,450
	$	0.37		$	0.31

Potentially dilutive securities excluded from the computation of net income per share because the effect of inclusion was antidilutive were as follows (in thousands):

	Quarter Ended March 31
	2014		2013
Antidilutive convertible preferred shares*		–		16,493
Antidilutive equity awards excludable under the treasury stock method		30		35

* The Series A and Series B preferred shares were redeemed in June 2013.