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 (prior to their redemption in June 2013 and 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 convertible preferred shares when such awards and shares were dilutive. The Series A and B preferred shares were considered dilutive whenever basic net income per common share exceeded each Series’ dividend divided by the applicable conversion rates. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock first issued in May 2013 are contingently convertible into common shares only upon the occurrence of a change in control and are therefore not considered dilutive securities absent such an occurrence. 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 for the indicated periods were as follows (dollars in thousands, except per share amounts):

	Quarter Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Basic net income per common share
Numerator for basic net income per common share:
Net income	$	32,391		$	24,702		$	107,346		$	89,514
Redemption premiums paid on Series A and Series B preferred shares*		–			–			–			(19,924	)
Preferred share dividends		(3,529	)		(3,188	)		(10,216	)		(14,325	)
Earnings participation of unvested stock awards		(24	)		(32	)		(58	)		(96	)
	$	28,838		$	21,482		$	97,072		$	55,169
Denominator for basic net income per common share:
Weighted average common shares outstanding		95,793			95,761			95,779			95,647
Average unvested stock awards outstanding		(388	)		(493	)		(395	)		(508	)
		95,405			95,268			95,384			95,139
	$	0.30		$	0.23		$	1.02		$	0.58
Diluted net income per common share
Numerator for diluted net income per common share:
Net income available to common stockholders	$	28,838		$	21,482		$	97,072		$	55,169
Dividends on dilutive convertible preferred shares		–			–			–			44
	$	28,838		$	21,482		$	97,072		$	55,213
Denominator for diluted net income per common share:
Basic weighted average common shares outstanding		95,405			95,268			95,384			95,139
Net effect of dilutive equity awards		272			148			230			133
Net effect of dilutive convertible preferred shares		–			–			–			101
		95,677			95,416			95,614			95,373
	$	0.30		$	0.23		$	1.02		$	0.58

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

	Quarter Ended September 30				Nine Months Ended September 30
	2014		2013		2014		2013
Antidilutive convertible preferred shares*		–		–		–		16,539
Antidilutive equity awards excludable under the treasury stock method		–		35		–		35

The Series A and Series B preferred shares were redeemed in June 2013 (See NOTE 9).