Equity

9 Months Ended

Sep. 30, 2012

Equity

Note 15. Equity

The following table provides a summary of changes to stockholders’ equity for the three and nine months ended September 30, 2012.

Stockholders’ Equity

(In Thousands)	Three Months Ended     September 30, 2012		Nine Months Ended     September 30, 2012
Balance at beginning of period	$	951,178	$	892,584
Net income		39,701		89,691
Unrealized gains on securities and derivatives, net		45,660		87,023
Equity issuance		31,991		36,424
Other, net		2,161		5,467
Distributions to shareholders		(20,839)		(61,337)
Balance at End of Period	$	1,049,852	$	1,049,852

Accumulated Other Comprehensive Income

The following table provides a summary of the components of accumulated other comprehensive income (loss) at September 30, 2012 and December 31, 2011.

(In Thousands)	September 30, 2012		December 31, 2011
Net unrealized gains on real estate securities	$	138,582	$	53,904
Net unrealized losses on interest rate agreements accounted for as cash flow hedges		(64,710)		(67,055)
Total Accumulated Other Comprehensive Income (Loss)	$	73,872	$	(13,151)

Earnings Per Common Share

The following table provides the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2012 and 2011.

Basic and Diluted Earnings Per Common Share

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, Except Share Data)	2012		2011		2012		2011
Basic Earnings Per Common Share:
Net income attributable to Redwood	$	39,701	$	1,297	$	89,691	$	28,901
Less: Dividends and undistributed earnings allocated to participating securities		1,104		520		2,631		1,659
Net income allocated to common shareholders	$	38,597	$	777	$	87,060	$	27,242
Basic weighted average common shares outstanding		79,685,099		78,470,625		78,908,057		78,275,796
Basic Earnings Per Common Share	$	0.48	$	0.01	$	1.10	$	0.35
Diluted Earnings Per Common Share:
Net income attributable to Redwood	$	39,701	$	1,297	$	89,691	$	28,901
Less: Dividends and undistributed earnings allocated to participating securities		861		520		2,200		1,659
Net income allocated to common shareholders	$	38,840	$	777	$	87,491	$	27,242
Basic weighted average common shares outstanding		79,685,099		78,470,625		78,908,057		78,275,796
Net effect of dilutive equity awards		1,079,281		-		1,267,603		-
Diluted weighted average common shares outstanding		80,764,380		78,470,625		80,175,660		78,275,796
Diluted Earnings Per Common Share	$	0.48	$	0.01	$	1.09	$	0.35

For the three and nine months ended September 30, 2012, there were 1,079,281 and 1,267,603 of dilutive equity awards, respectively, determined under the two-class method. For the three and nine months ended September 30, 2011, there were no dilutive equity awards determined under the two-class method as dividend distributions were greater than net income. We included participating securities in the calculation of diluted earnings per common share as we determined that the two-class method was more dilutive than the alternative treasury stock method. For the three and nine months ended September 30, 2012, the number of outstanding equity awards that were antidilutive totaled 1,014,274 and 704,087, respectively, under the two-class method. For the three and nine months ended September 30, 2011, the number of outstanding equity awards that were antidilutive totaled 1,689,546 and 1,850,659, respectively, under the two-class method. There were no other participating securities during these periods.

Stock Repurchases

We announced a stock repurchase authorization in November 2007 for the repurchase of up to 5,000,000 common shares. This plan replaced all previous share repurchase plans and has no expiration date. During the nine months ended September 30, 2012, there were no shares acquired under the plan. At September 30, 2012, there remained 4,005,985 shares available for repurchase under this plan.