Earnings Per Share

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 September 30, 2018, there were 29,142,547 of Class A common shares outstanding. The Company has included 253,772 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 6(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, for the entire period being presented. The number of performance-linked unvested restricted stock units that are included in the calculation are at the amount that could be earned using current payout rates. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the amount of compensation cost attributed to future services and not yet recognized.

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:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands, except share and per share data)
Net income (loss)	$	20,778	$	9,828	$	78,793	$	50,502
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds	5,290		5,162		41,053		35,412
Net income (loss) attributable to Cowen Inc.	15,488		4,666		37,740		15,090
Preferred stock dividends	1,698		1,698		5,094		5,094
Net income (loss) attributable to Cowen Inc. common stockholders	$	13,790	$	2,968	$	32,646	$	9,996

Shares for basic and diluted calculations:
Weighted average shares used in basic computation	29,610		31,271		29,662		29,004
Stock options			—		—		—
Stock appreciation rights	—		20		—		15
Restricted stock	1,234		955		951		992
Weighted average shares used in diluted computation	30,844		32,246		30,613		30,011
Earnings (loss) per share:
Basic	$	0.47	$	0.09	$	1.10	$	0.34
Diluted	$	0.45	$	0.09	$	1.07	$	0.33