Quarterly report pursuant to Section 13 or 15(d)

EQUITY AND EARNINGS PER SHARE

v3.5.0.2
EQUITY AND EARNINGS PER SHARE
 9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
EQUITY AND EARNINGS PER SHARE
EQUITY AND EARNINGS PER SHARE
 
A. Equity

The following is a summary of the changes in Newcastle’s outstanding options for the nine months ended September 30, 2016:
 
Number of Options
 
Weighted Average Strike Price
 
Weighted Average Life Remaining (in years)
Balance at December 31, 2015
5,421,561

 
$
2.85

 
 
Granted (A)
333

 
3.78

 
 
Balance at September 30, 2016
5,421,894

 
$
2.86

 
6.04
 
 
 
 
 
 
Exercisable at September 30, 2016
5,294,325

 
$
2.83

 
5.98

(A)
Options granted to a non-employee director upon joining the board of directors.

As of September 30, 2016, Newcastle’s outstanding options were summarized as follows:
 
Issued Prior to 2011
 
Issued in 2011 and thereafter
 
Total
Held by the Manager
115,239

 
5,010,243

 
5,125,482

Issued to the Manager and subsequently transferred to certain of the Manager’s employees
29,422

 
266,657

 
296,079

Issued to the independent directors
—

 
333

 
333

Total
144,661

 
5,277,233

 
5,421,894

Weighted average strike price
$
13.18

 
$
2.57

 
$
2.86



On March 29, 2016, Newcastle declared a quarterly dividend of $0.12 per common share, for the quarter ended March 31, 2016 and declared dividends of $0.609375, $0.503125 and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively, for the period beginning February 1, 2016 and ending April 30, 2016. Dividends totaling $9.4 million were paid in April 2016.

On July 12, 2016, Newcastle declared a quarterly dividend of $0.12 per common share, for the quarter ended June 30, 2016 and declared dividends of $0.609375, $0.503125, and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively, for the period beginning May 1, 2016 and ending July 31, 2016. Dividends totaling $9.4 million were paid in July 2016.

As of September 30, 2016, Newcastle had $0.9 million ($0.38 per share) of preferred dividends in arrears.

On October 13, 2016, Newcastle declared a quarterly dividend of $0.12 per common share, for the quarter ended September 30, 2016 and declared dividends of $0.609375, $0.503125, and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively, for the period beginning August 1, 2016 and ending October 31, 2016. Dividends totaling $9.4 million were paid in October 2016.

In May 2016 and July 2016, Newcastle issued a total of 57,740 and 21,798 shares, respectively, of its common stock to its independent directors as a component of their annual compensation.

B. Earnings Per Share

Newcastle is required to present both basic and diluted earnings per share (“EPS”). The following table shows the amounts used in computing basic and diluted EPS:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Numerator for basic and diluted earnings per share:
 
 
 
 
 
 
 
Income from continuing operations after preferred dividends and noncontrolling interests
$
18,923

 
$
6,492

 
$
92,598

 
$
20,780

Income from discontinued operations, net of tax
—

 
7

 
—

 
646

Income Applicable to Common Stockholders
$
18,923

 
$
6,499

 
$
92,598

 
$
21,426

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share - weighted average shares
66,730,583

 
66,484,962

 
66,688,962

 
66,445,705

Effect of dilutive securities
 
 
 
 
 
 
 
Options
2,342,093

 
2,584,697

 
2,064,570

 
2,607,597

Denominator for diluted earnings per share - adjusted weighted average shares
69,072,676

 
69,069,659

 
68,753,532

 
69,053,302

 
 
 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
 
 
Income from continuing operations per share of common stock, after preferred dividends and noncontrolling interests
$
0.28

 
$
0.10

 
$
1.39

 
$
0.31

Income from discontinued operations per share of common stock
$
—

 
$
—

 
$
—

 
$
0.01

Income Applicable to Common Stock, per share (A)
$
0.28

 
$
0.10

 
$
1.39

 
$
0.32

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Income from continuing operations per share of common stock, after preferred dividends and noncontrolling interests
$
0.27

 
$
0.09

 
$
1.35

 
$
0.30

Income from discontinued operations per share of common stock
$
—

 
$
—

 
$
—

 
$
0.01

Income Applicable to Common Stock, per share (A)
$
0.27

 
$
0.09

 
$
1.35

 
$
0.31

(A)
Due to rounding, income per share from continuing operations and income per share from discontinued operations may not sum to the income per share of common stock.

Basic EPS is calculated by dividing income applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted EPS is calculated by dividing income applicable to common stockholders by the weighted average number of shares of common stock outstanding plus the additional dilutive effect of common stock equivalents during each period. Newcastle’s common stock equivalents are its outstanding stock options. During the nine months ended September 30, 2016 and 2015, Newcastle had 335,725 and 251,459 antidilutive options, respectively. During the three months ended September 30, 2016 and 2015, based on the treasury stock method, Newcastle had 2,342,093 and 2,584,697 dilutive common stock equivalents, respectively, resulting from its outstanding options. During the nine months ended September 30, 2016 and 2015, based on the treasury stock method, Newcastle had 2,064,570 and 2,607,597 dilutive common stock equivalents, respectively, resulting from its outstanding options. Income applicable to common stockholders is equal to net income less preferred dividends and net income attributable to noncontrolling interests.