NOTE 3 ¾ NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income, after (a) deducting dividends paid or accrued on preferred stock, (b) deducting any preferred stock redemption premiums paid and (c) allocating earnings to equity awards deemed to be participating securities pursuant to the two-class method, by the weighted average number of shares of common stock outstanding, calculated excluding unvested stock awards. Participating securities include any unvested equity awards that contain non-forfeitable rights to dividends prior to vesting.

Diluted net income per common share is computed by dividing the numerator used to compute basic net income per common share after adding back any dividends on shares of convertible preferred stock (prior to their redemption in June 2013 and when such shares were dilutive), by the denominator used to compute basic net income per common share, further adjusted for the dilutive effect, if any, of equity awards and shares of convertible preferred stock. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock first issued in May 2013 are contingently convertible into shares of common stock only upon the occurrence of a change in control and therefore are not considered dilutive securities absent such an occurrence. Any unvested equity 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
	2014			2013			2012
Basic net income per common share
Numerator for basic net income per common share:
Net income	$	140,820		$	126,487		$	163,626
Redemption preference premiums paid on Convertible preferred stock		–			(19,924	)		–
Preferred stock dividends		(13,781	)		(17,536	)		(21,021	)
Earnings participation of unvested equity awards		(95	)		(139	)		(372	)
	$	126,944		$	88,888		$	142,233
Denominator for basic net income per common share:
Weighted average common stock outstanding		95,789			95,679			95,115
Average unvested stock awards outstanding		(398	)		(506	)		(522	)
		95,391			95,173			94,593
	$	1.33		$	0.93		$	1.50
Diluted net income per common share
Numerator for diluted net income per common share:
Numerator for basic net income per common share	$	126,944		$	88,888		$	142,233
Dividends on dilutive convertible preferred stock		–			44			298
	$	126,944		$	88,932		$	142,531
Denominator for diluted net income per common share:
Denominator for basic net income per common share		95,391			95,173			94,593
Net effect of dilutive equity awards		238			145			111
Net effect of dilutive convertible preferred stock		–			75			308
		95,629			95,393			95,012
	$	1.33		$	0.93		$	1.50

Securities that could be potentially dilutive in the future that were not included in the computation of diluted net income per common share because to do so would have been antidilutive during the indicated periods were as follows (in thousands):

	Year ended December 31
	2014		2013		2012
Antidilutive convertible preferred stock		–		–		16,493
Antidilutive equity awards excludable under the treasury stock method:
Shares issuable under option awards		15		30		10
RSUs		–		243		–