Note 5. Earnings per Common Share

Earnings per common share—basic, is computed by dividing net income allocable to common shareholders (net income less preferred stock dividends) by the weighted-average number of common shares outstanding for the period.

Earnings per common share—diluted, is computed by dividing the sum of net income allocable to common shareholders and interest expense on the Company's convertible notes, by the weighted-average number of common shares—diluted. Dilutive securities are included in the calculation of diluted earnings per common share using the treasury stock method and the if-converted method in accordance with Accounting Standards Codification (“ASC”) Topic 260, “Earnings per Share.” Dilutive securities include the common stock equivalents of convertible preferred stock and convertible notes, options granted pursuant to the Company’s stock option plans and outstanding restricted stock units and performance share units granted to employees and non-employee directors (see Note 13). There were no shares outstanding of the Company's Series B Cumulative Perpetual Convertible Preferred Stock as of September 30, 2014 (see Note 4).

Weighted-average common shares outstanding—diluted is the same as weighted-average common shares outstanding—basic in periods when a net loss is reported or in periods when diluted earnings per share is higher than basic earnings per share.

The following table summarizes the computation of basic and diluted earnings per share (in thousands, except per share data):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014		2013
Earnings (loss) per common share—basic
Net income (loss)	$	(1,134	)	$	(21,153	)	$	57,547	$	30,578
Less: Preferred stock dividends	—			1,766			—		3,332
Net income (loss) allocable to common shareholders	$	(1,134	)	$	(22,919	)	$	57,547	$	27,246
Weighted-average common shares outstanding—basic	77,646			72,649			77,551		71,613
Basic earnings (loss) per common share	$	(0.01	)	$	(0.32	)	$	0.74	$	0.38
Earnings (loss) per common share—diluted
Net income (loss)	$	(1,134	)	$	(21,153	)	$	57,547	$	30,578
Less: Preferred stock dividends	—			1,766			—		3,332
Add: Interest on convertible debt, net of tax	—			—			3,715		3,673
Net income (loss) including assumed conversions	$	(1,134	)	$	(22,919	)	$	61,262	$	30,919
Weighted-average common shares outstanding—basic	77,646			72,649			77,551		71,613
Convertible notes weighted-average shares outstanding	—			—			15,000		15,000
Options and restricted stock	—			—			833		257
Weighted-average common shares outstanding—diluted	77,646			72,649			93,384		86,870
Dilutive earnings (loss) per common share	$	(0.01	)	$	(0.32	)	$	0.66	$	0.36

Earnings per share—dilutive, reflects the potential dilution that could occur if securities, or other contracts to issue common stock, were exercised or converted into common stock. Options with an exercise price in excess of the average market value of the Company's common stock during the period have been excluded from the calculation as their effect would be antidilutive.

For the three months ended September 30, 2014 and 2013, securities outstanding totaling approximately 16,753,000 (including common shares underlying convertible senior notes of 15,000,000) and 24,716,000 shares (including common shares underlying convertible senior notes of 15,000,000, and common shares underlying 4,446,000 preferred shares), respectively, have been excluded from the calculation of earnings per common share—diluted, as their effect would be antidilutive. For the nine months ended September 30, 2014 and 2013, securities totaling approximately 2,717,000 and 11,117,000 (including common shares underlying 5,426,000 preferred shares), respectively, have been excluded from the calculation of earnings per common share—diluted, as their effect would be antidilutive.