NOTE 3 ¾ NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income, after deducting preferred share dividends and adjusting for the impact of unvested stock awards deemed to be participating securities, by the weighted average number of common shares outstanding, calculated excluding unvested stock awards.

Diluted net income per common share is computed by dividing net income available to common stockholders, after adding dividends on the Company’s Series A and B convertible preferred shares when such shares were dilutive, by the basic weighted average number of common shares and common share equivalents outstanding, giving effect to equity awards and these convertible preferred shares when such awards and shares were dilutive. Prior to their redemption on June 13, 2013, the Series A and B preferred shares were considered dilutive whenever basic net income per common share exceeded each Series’ dividend divided by the conversion rates applicable for that period. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock issued in 2013 are contingently convertible into common shares only upon the occurrence of a change in control and are therefore not presently considered dilutive securities. Unvested stock awards that are deemed participating securities are included in the calculation of diluted net income per common share, if dilutive, under either the two class method or the treasury stock method, depending upon which method produces the more dilutive result.

Components of the computation of basic and diluted net income per common share were as follows for the indicated periods (dollars in thousands, except per share amounts):

	Year ended December 31
	2013			2012			2011
Basic net income per common share
Numerator for basic net income per common share:
Net income	$	126,487		$	163,626		$	160,204
Preferred share dividends		(17,536	)		(21,021	)		(20,369	)
Redemption preference premiums paid on Series A and Series B preferred shares*		(19,924	)		–			–
Unvested stock award participation in earnings		(139	)		(372	)		(579	)

	$	88,888		$	142,233		$	139,256
Denominator for basic net income per common share:
Weighted average common shares outstanding		95,679			95,115			79,784
Average unvested stock awards outstanding		(506	)		(522	)		(468	)
		95,173			94,593			79,316
	$	0.93		$	1.50		$	1.76
Diluted net income per common share
Numerator for diluted net income per common share:
Net income available to common stockholders	$	88,888		$	142,233		$	139,256
Dividends on dilutive convertible preferred shares		44			298			298
	$	88,932		$	142,531		$	139,554
Denominator for diluted net income per common share:
Basic weighted average common shares outstanding		95,173			94,593			79,316
Net effect of dilutive stock and option awards		145			111			71
Net effect of dilutive convertible preferred shares		75			308			309
		95,393			95,012			79,696
	$	0.93		$	1.50		$	1.75

The Series A and Series B preferred shares were redeemed on June 13, 2013 (See NOTE 11).

Potentially dilutive securities excluded from the computation of net income per share because the effect of inclusion was antidilutive during the indicated periods were as follows (in thousands):

	Year ended December 31
	2013		2012		2011
Antidilutive convertible preferred shares*		16,539		16,493		16,184

Antidilutive equity awards excludable under the treasury stock method:
Shares issuable under option awards		30		10		40
Restricted stock units		243		–		–

The Series A and Series B preferred shares were redeemed on June 13, 2013 (See NOTE 11).