NOTE 3 — NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income, after deducting dividends paid or accrued on preferred stock and allocating earnings to equity awards deemed to be participating securities pursuant to the two-class method, by the average number of shares of common stock outstanding, calculated excluding unvested stock awards. Participating securities include 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 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 preferred stock when and if convertible into shares of common stock. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock 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
	2017			2016			2015
Basic net income per common share
Numerator for basic net income per common share:
Net income	$	79,589		$	82,873		$	108,325
Preferred stock dividends		(17,442	)		(15,372	)		(15,160	)
Earnings participation of unvested equity awards		(150	)		(140	)		(123	)
	$	61,997		$	67,361		$	93,042
Denominator for basic net income per common share:
Average number of shares of common stock outstanding		96,023			95,957			95,817
Average unvested stock awards outstanding		(305	)		(301	)		(308	)
		95,718			95,656			95,509

	$	0.65		$	0.70		$	0.97
Diluted net income per common share
Numerator for diluted net income per common share:
Numerator for basic net income per common share	$	61,997		$	67,361		$	93,042
Denominator for diluted net income per common share:
Denominator for basic net income per common share		95,718			95,656			95,509
Net effect of dilutive equity awards		125			163			192
		95,843			95,819			95,701

	$	0.65		$	0.70		$	0.97