Earnings per Share

Earnings per share was calculated using the treasury method for all periods presented. For the nine and three months ended September 30, 2011, this calculation included the Company's 9.0% Series D1 Mandatory Convertible Preferred Stock, par value $0.01 per share (the "Series D Preferred Stock"), which was assumed to be converted to 1,875,000 shares of common stock that shared in distributions with common shareholders on a 1:1 basis through the date of the Recapitalization.

The computations of basic and diluted earnings per share for the nine and three months ended September 30, 2012 and 2011 (dollars in thousands, except share and per share amounts) are as follows:



	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
	2012			2011			2012			2011
Numerator:
Net income	$	61,042		$	6,688		$	(3,320	)	$	4,202
Less income attributable to noncontrolling interests	(1,508		)	2			(1,114		)	(244		)
Dividends on preferred shares	—			(8,428		)	—			—
Net effect of the Recapitalization (A)	—			95,460			—			—
Income (loss) available to common shareholders	$	62,550		$	93,718		$	(2,206	)	$	4,446

Denominator:
Weighted average common shares outstanding – basic	90,530,738			39,261,555			90,651,716			90,326,299

Weighted average common shares outstanding – dilutive:
Weighted average common shares outstanding – basic	90,530,738			39,261,555			90,651,716			90,326,299
Stock options	548,468			—			451,548			—
Nonvested shares	355,776			165,769			224,294			491,901
Weighted average common shares outstanding – dilutive	91,434,982			39,427,324			91,327,558			90,818,200

Basic earnings per share:
Net income	$	0.67		$	0.17		$	(0.03	)	$	0.05
Less income attributable to noncontrolling interests	(0.02		)	—			(0.01		)	—
Dividends on preferred shares	—			(0.21		)	—			—
Net effect of the Recapitalization (A)	—			2.43			—			—
Net income (loss) available to common shareholders	$	0.69		$	2.39		$	(0.02	)	$	0.05

Diluted earnings per share:
Net income	$	0.67		$	0.17		$	(0.03	)	$	0.05
Less income attributable to noncontrolling interests	(0.01		)	—			(0.01		)	—
Dividends on preferred shares	—			(0.21		)	—			—
Net effect of the Recapitalization (A)	—			2.42			—			—
Net income (loss) available to common shareholders	$	0.68		$	2.38		$	(0.02	)	$	0.05

(A)

The net effect of the Recapitalization includes amounts attributable to the Series C Offer and the Series D Exchange and was calculated in accordance with applicable Earnings per Share guidance. The Series C Offer amount is calculated as the difference between (1) the fair value of the consideration transferred to the holders of the Series C Preferred Stock and (2) the carrying amount of the Series C Preferred Stock. The Series D Exchange amount consists of the excess of (1) the fair value of all securities and other consideration transferred by the Company to the Series D Holders over (2) the fair value of securities issuable pursuant to the original conversion terms. See Note 14 to the condensed consolidated financial statements for further details.

The following weighted-average stock options to purchase shares of Common Stock were outstanding during each period presented, but were not included in the computation of diluted earnings (loss) per share because the number of shares assumed to be repurchased, as calculated was greater than the number of shares to be obtained upon exercise, therefore, the effect would be antidilutive (in thousands, except exercise prices):



	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
	2012		2011		2012		2011
Number of stock options	6,877		547		7,384		705
Weighted average exercise price of stock options	$	0.77	$	11.53	$	0.76	$	8.07

During the first quarter of 2012, the Company granted 6.9 million options to purchase shares of Common Stock at a weighted average exercise price of $0.77. The weighted average impact of 5.9 million shares and 6.4 million shares are included in the table above for the nine and three months ended September 30, 2012, respectively.

Of the 6.9 million total options granted, 5.3 million relate to a non-discretionary anti-dilution provision adjustment to preserve the benefits and potential benefits of grants issued prior to the Recapitalization. These options maintained the original exercise prices and vesting terms of the respective initial grants. There were no options granted during the three months ended September 30, 2012.

The Company had approximately 0.8 million and 30,000 of additional nonvested shares outstanding as of September 30, 2012 and September 30, 2011, respectively which have original cliff vesting schedules ranging between five and ten years. Of these, approximately 0.6 million shares were not included in the calculation of earnings per share for the nine and three months ended September 30, 2012, while 30,000 nonvested shares were not included in the calculation of earnings per share for the nine and three months ended September 30, 2011, because they were anti-dilutive.