Earnings Per Share

We have shares of restricted stock issued and outstanding that are currently unvested. Holders of shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our unrestricted common stock and the shares of restricted stock are thus considered participating securities. Under applicable accounting guidance, the undistributed earnings for each period are allocated based on the participation rights of both common shareholders and the holders of any participating securities as if earnings for the respective periods had been distributed. Because both the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, we are required to compute earnings per share (“EPS”) under the two class method in periods in which we have earnings. For periods in which we have a net loss we do not use the two class method as holders of our restricted shares are not obligated to share in such losses.

The presentation of basic EPS amounts on the face of the accompanying condensed consolidated statements of operations is computed by dividing net income or loss by the weighted average shares of our common stock outstanding. The calculation of diluted EPS is similar to that for basic EPS, except that the denominator includes dilutive common stock equivalents and the numerator excludes the effects of dilutive common stock equivalents, if any. The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2018 are as follows (in thousands):



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
	Income			Shares	Income			Shares
Basic:
Net income	$	27,121			$	2,290
Less: Undistributed earnings allocated to participating securities	(260		)		(27		)
Undistributed earnings allocated to common shares	$	26,861		146,700	$	2,263		145,958

Diluted:
Undistributed earnings allocated to common shares	$	26,861		146,700	$	2,263		145,958
Effect of dilutive securities:
Share-based awards other than participating securities	—			264	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income	$	26,861		146,964	$	2,263		145,958



	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
	Income			Shares	Income			Shares
Basic:
Net income (loss)	$	42,345			$	(20,528	)
Less: Undistributed earnings allocated to participating securities	(407		)		—
Undistributed earnings allocated to common shares	$	41,938		146,679	$	(20,528	)	145,057

Diluted:
Undistributed earnings allocated to common shares	$	41,938		146,679	$	(20,528	)	145,057
Effect of dilutive securities:
Share-based awards other than participating securities	—			82	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income (loss)	$	41,938		146,761	$	(20,528	)	145,057

We had a net loss for the nine-month period ended September 30, 2017. Accordingly, our diluted EPS calculation for this period was equivalent to our basic EPS calculation since diluted EPS excluded any assumed exercise or conversion of common stock equivalents. These common stock equivalents were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period. Shares that otherwise would have been included in the diluted per share calculations assuming we had earnings are as follows (in thousands):



		Nine Months Ended
		September 30, 2017

Diluted shares (as reported)		145,057
Share-based awards		364
Total		145,421

In addition, the following potentially dilutive shares related to the 2022 Notes, the 2023 Notes and the 2032 Notes were excluded from the diluted EPS calculation because we have the right and the intention to settle any such future conversions in cash (Note 6) (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2018	2017	2018	2017

2022 Notes	8,997	8,997	8,997	8,997
2023 Notes	13,202	—	9,381	—
2032 Notes ⁽¹⁾	—	2,403	701	2,403


(1)	The 2032 Notes were fully redeemed in May 2018.