Capital Stock

Preferred Stock

In February 2017, the Company issued 13,000,000 shares of 8.00% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), at a public offering price of $25.00 per share. The Series B Preferred Stock is redeemable at $25.00 per share plus accrued and unpaid dividends (whether or not authorized or declared) exclusively at the Company’s option commencing in March 30, 2024, subject to the Company’s right, under limited circumstances, to redeem the Series B Preferred Stock prior to that date. The initial dividend rate for the Series B Preferred Stock, from and including February 27, 2017, to but not including March 30, 2024, will be equal to 8.00% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual rate of $2.00 per share). On and after March 30, 2024, dividends on the Series B Preferred Stock will accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 5.791% per annum. The Series B Preferred Stock is entitled to receive, when and as declared, a dividend at a rate of 8.0% per year on the $25.00 liquidation preference before the common stock is paid any dividends and is senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. This transaction was completed in February 2017, pursuant to which the Company received proceeds, net of offering costs, of $314 million.

The Company declared dividends to Series B preferred stockholders of $7 million and $9 million, or $0.50 and $0.68 per preferred share during the quarter and six months ended June 30, 2017.

In October 2016, the Company issued 5,800,000 shares of 8.00% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), at a public offering price of $25.00 per share. The Series A Preferred Stock is redeemable at $25.00 per share plus accrued and unpaid dividends (whether or not authorized or declared) exclusively at the Company’s option commencing in October 30, 2021, subject to the Company’s right, under limited circumstances, to redeem the Series A Preferred Stock prior to that date. The Series A Preferred Stock is entitled to receive, when and as declared, a dividend at a rate of 8.0% per year on the $25.00 liquidation preference before the common stock is paid any dividends and is senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. This transaction was completed in October 2016, pursuant to which the Company received proceeds, net of offering costs, of $140 million.

The Company declared dividends to Series A preferred stockholders of $3 million and $6 million, or $0.50 and $1.00 per preferred share during the quarter and six months ended June 30, 2017.

Common Stock

Our Board of Directors adopted a program that authorizes repurchases of our common stock up to $350 million. Shares of our common stock may be purchased in the open market, including through block purchases, through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any repurchases will be determined at our discretion and the program may be suspended, terminated or modified at any time for any reason. Among other factors, the Company intends to only consider repurchasing shares of our common stock when the purchase price is less than its estimate of its current net asset value per common share. Generally, when the Company repurchases its common stock at a discount to its net asset value, the net asset value of its remaining shares of common stock outstanding increases. In addition, the Company does not intend to repurchase any shares from directors, officers or other affiliates. The program does not obligate the Company to acquire any specific number of shares, and all repurchases will be made in accordance with Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of stock repurchases.

The Company did not repurchase any shares during the quarter and six months ended June 30, 2017, and has $100 million in its share repurchase program that may be used to repurchase shares in the future.

During the quarters and six months ended June 30, 2017, the Company declared regular dividends to common shareholders of $0.50 and $1.00 per share or $94 million and $188 million, respectively. During the quarters and six months ended June 30, 2016, the Company declared regular dividends to common shareholders of $0.48 and $0.96 per share or $90 million and $180 million, respectively, and a special dividend of $0.50 per share to common shareholders of $94 million.

Earnings per share for the quarters and six months ended June 30, 2017, and 2016, respectively, are computed as follows:



	For the Quarters Ended
	June 30, 2017		June 30, 2016
	(dollars in thousands)
Numerator:
Net income available to common shareholders	$	105,617	$	74,127
Effect of dilutive securities:	—		—
Dilutive net income available to common shareholders	$	105,617	$	74,127

Denominator:
Weighted average basic shares	187,779,406		187,729,765
Effect of dilutive securities	363,145		195,281
Weighted average dilutive shares	188,142,551		187,925,046

Net income per average share attributable to common stockholders - Basic	$	0.56	$	0.39
Net income per average share attributable to common stockholders - Diluted	$	0.56	$	0.39



	For the Six Months Ended
	June 30, 2017		June 30, 2016
	(dollars in thousands)
Numerator:
Net income available to common shareholders	$	263,141	$	157,226
Effect of dilutive securities:	—		—
Dilutive net income available to common shareholders	$	263,141	$	157,226

Denominator:
Weighted average basic shares	187,770,626		187,726,618
Effect of dilutive securities	398,467		155,996
Weighted average dilutive shares	188,169,093		187,882,614

Net income per average share attributable to common stockholders - Basic	$	1.40	$	0.84
Net income per average share attributable to common stockholders - Diluted	$	1.40	$	0.84