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Earnings Per Share
12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]  
Earnings Per Share
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average common shares and potentially dilutive securities outstanding during the period.
Earnings per share is calculated using the two-class method, which requires the allocation of earnings to each class of common stock outstanding and to unvested stock-based payment awards that participate equally in dividends with common stock, also referred to herein as unvested participating shares.
The Company’s unvested stock-based payment awards include unvested shares awarded as restricted stock awards. See Note 11, “Stockholders’ Equity and Stock-Based Compensation,” for a discussion of the current year unvested stock awards and issuances.
Earnings per Share - Basic
The following table sets forth the computation of earnings per share using the two-class method (in thousands, except share and per share amounts):
 
Years ended December 31,
 
2018
 
2017
 
2016
Basic earnings per share:
 
 
 
 
 
Net income
$
157,981

 
$
156,963

 
$
94,760

Allocation of net income to common stockholders:
 
 
 
 
 
Common stock
$
157,096

 
$
155,995

 
$
93,919

Unvested participating shares
885

 
968

 
841

 
$
157,981

 
$
156,963

 
$
94,760

 
 
 
 
 
 
Weighted average number of common shares:
 
 
 
 
 
Common stock
57,812,602

 
58,873,196

 
59,229,069

Unvested participating shares
325,289

 
366,029

 
531,364

Earnings per common share:
 
 
 
 
 
Common stock
$
2.72

 
$
2.65


$
1.59


Earnings per Share - Diluted
The Company calculates diluted earnings per share for common stock using the more dilutive of the treasury stock method, or the two-class method. The following table sets forth the computation of diluted earnings per share using the two-class method (in thousands, except share and per share amounts):
 
Years ended December 31,
 
2018
 
2017
 
2016
Diluted earnings per share:
 
 
 
 
 
Earnings allocated to common stock
$
157,096

 
$
155,995

 
$
93,919

Plus earnings allocated to unvested participating shares
885

 
968

 
841

Less adjusted earnings allocated to unvested participating shares
(867
)
 
(947
)
 
(822
)
Earnings allocated to common stock
$
157,114

 
$
156,016

 
$
93,938

 
 
 
 
 
 
Weighted average number of common shares:
 
 
 
 
 
Common stock
57,812,602

 
58,873,196

 
59,229,069

Effect of dilutive securities
1,188,067

 
1,380,495

 
1,365,826

 
59,000,669

 
60,253,691

 
60,594,895

Earnings per common share:
 
 
 
 
 
Common stock
$
2.66

 
$
2.59

 
$
1.55


Options outstanding to purchase 0.5 million, 0.6 million and 0.5 million shares of common stock were excluded from diluted earnings per share for the years ended December 31, 2018, 2017, and 2016, respectively, since their effect was anti-dilutive. These options may become dilutive in the future.