Earnings Per Share

We have shares of restricted stock issued and outstanding that currently are unvested. Holders of such shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our outstanding unrestricted common stock and the shares of restricted stock are thus considered participating securities. Under applicable accounting guidance, the undistributed earnings for each period are allocated based on the participation rights of both the common shareholders and holders of any participating securities as if earnings for the respective periods had been distributed. Because both the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, we are required to compute earnings per share (“EPS”) amounts under the two class method in periods in which we have earnings. For periods in which we have a net loss we do not use the two class method as holders of our restricted shares are not obligated to share in such losses.

The presentation of basic EPS amounts on the face of the accompanying condensed consolidated statements of operations is computed by dividing the net income applicable to our common shareholders by the weighted average shares of our outstanding common stock. The calculation of diluted EPS is similar to basic EPS, except that the denominator includes dilutive common stock equivalents and the income included in the numerator excludes the effects of the impact of dilutive common stock equivalents, if any. The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations are as follows (in thousands):



	Three Months Ended September 30, 2016				Three Months Ended September 30, 2015
	Income			Shares	Income			Shares
Basic:
Net income	$	11,462			$	9,880
Less: Undistributed earnings allocated to participating securities	(160		)		(52		)
Undistributed earnings allocated to common shares	$	11,302		113,680	$	9,828		105,438

Diluted:
Undistributed earnings allocated to common shares	$	11,302		113,680	$	9,828		105,438
Effect of dilutive securities:
Share-based awards other than participating securities	—			—	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income	$	11,302		113,680	$	9,828		105,438



	Nine Months Ended September 30, 2016				Nine Months Ended September 30, 2015
	Income			Shares	Income			Shares
Basic:
Net income (loss)	$	(27,032	)		$	26,887
Less undistributed earnings allocated to participating securities	—				(149		)
Undistributed earnings (loss) allocated to common shares	$	(27,032	)	109,135	$	26,738		105,362

Diluted:
Undistributed earnings (loss) allocated to common shares	$	(27,032	)	109,135	$	26,738		105,362
Effect of dilutive securities:
Share-based awards other than participating securities	—			—	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income (loss)	$	(27,032	)	109,135	$	26,738		105,362

We had a net loss for the nine-month period ended September 30, 2016. Accordingly, our diluted EPS calculation for the nine-month period ended September 30, 2016 was equivalent to our basic EPS calculation since diluted EPS excluded any assumed exercise or conversion of common stock equivalents. These common stock equivalents were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period. Shares that otherwise would have been included in the diluted per share calculation assuming we had earnings are as follows (in thousands):



	Nine Months Ended
	September 30, 2016

Diluted shares (as reported)	109,135
Share-based awards	308
Total	109,443

In addition, the following potentially dilutive shares related to the 2032 Notes were excluded from the diluted EPS calculation because we have the right and the intention to settle any such future conversions in cash (Note 6) (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015

2032 Notes	7,493	7,995	7,814	7,995