Earnings Per Share

12 Months Ended

Dec. 31, 2016

The Company calculates its basic and diluted earnings per share in accordance with US GAAP. Basic earnings per share is calculated by dividing net income attributable to the Company's common stockholders by the weighted average number of common shares outstanding for the period. As of December 31, 2016, there were 26,731,289 shares outstanding. The Company has included 162,176 fully vested, unissued restricted stock units in its calculation of basic earnings per share.

Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive items. The Company uses the treasury stock method to reflect the potential dilutive effect of the warrants (see Note 5(a)), unexercised stock options, unvested restricted shares, restricted stock units, and SAR's. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options and warrants are assumed to have been exercised, on the grant date. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the sum of (a) the amount of compensation cost attributed to future services and not yet recognized and (b) the amount of tax benefit that would be credited to additional paid-in capital assuming vesting and delivery of the shares. The tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial statement reporting purposes. All outstanding stock options, SAR's, unvested restricted shares and warrants were not included in the computation of diluted net income (loss) per common share for the year ended December 31, 2016 as their inclusion would have been anti-dilutive. The Company can elect to settle the Series A Convertible Preferred Stock in shares, cash, or a combination of both. The Company's intent is to settle in cash and, based on current and projected liquidity needs, the Company has the ability to do so.

The computation of earnings per share is as follows:



	Year Ended December 31,
	2016			2015		2014
	(dollars in thousands, except per share data)
Net income (loss)	$	(12,395	)	$	58,975	$	182,780
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds	6,882			15,246		15,564
Net income (loss) attributable to Cowen Group, Inc.	(19,277		)	43,729		167,216
Preferred stock dividends	6,792			4,075		—
Net income (loss) attributable to Cowen Group, Inc. common stockholders	$	(26,069	)	$	39,654	$	167,216

Shares for basic and diluted calculations:
Weighted average shares used in basic computation (a)	26,857			27,522		28,731
Stock options (a)	—			3		—
Performance based restricted stock (a)	—			65		—
Stock appreciation rights (a)	—			35		15
Restricted stock (a)	—			1,418		1,125
Weighted average shares used in diluted computation (a)	26,857			29,043		29,871
Earnings (loss) per share:
Basic (a)	$	(0.97	)	$	1.44	$	5.82
Diluted (a)	$	(0.97	)	$	1.37	$	5.60

(a) Share and per share amounts have been retroactively updated to reflect the one-for-four reverse stock split effective as of December 5, 2016.