15. Weighted Average Shares Outstanding and Net Income Per Share

The following table presents a reconciliation of the weighted average shares outstanding used in calculating basic and diluted net income per share as well as the calculation of basic and diluted net income per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2018		2017		2018		2017
Numerator (basic and diluted)
Net income allocated to common shareholders for basic calculation	$	55,672	$	45,982	$	35,864	$	36,325
Effect of dilutive convertible notes		296		—		—		—
Net income allocated to common shareholders for diluted calculation		55,968		45,982		35,864		36,325
Denominator
Weighted average common shares outstanding, basic		46,308		39,844		42,443		39,774
Dilutive effect of convertible notes, restricted stock units and common stock options¹		1,502		543		467		593
Weighted average common shares outstanding, diluted		47,810		40,387		42,910		40,367
Net income per share, basic	$	1.20	$	1.15	$	0.84	$	0.91
Net income per share, diluted	$	1.17	$	1.14	$	0.84	$	0.90

¹Weighted average shares of approximately 1.1 million have been included in the number of shares used in calculating diluted net income per share for the three months ended September 30, 2018 based on the assumption that the 8% Convertible Notes were converted to Granite shares as of July 1, 2018 through their conversion on August 15, 2018. The shares have been excluded from the nine months ended September 30, 2018 as their inclusion would be antidilutive. See Note 14 for further discussion on the 8% Convertible Notes.