Earnings per Common Share

12 Months Ended

Dec. 31, 2019

Basic and diluted earnings per common share are calculated by dividing the net income or loss attributable to common shareholders by the basic and diluted weighted-average number of common shares outstanding in the period, respectively, using the allocation method prescribed by the two-class method. The Company applies this method to compute earnings per share because it distributes non-forfeitable dividend equivalents on restricted stock units granted to certain employees and non-employee trustees who have the right to participate in the distribution of common dividends while the restricted stock units are unvested. For the year ended December 31, 2019, the weighted-average number of unvested restricted stock units that participated in the distribution of common dividends was 1,405,421, of which 629,929 restricted stock units currently have vested but will not be settled until additional criteria are met.

The shares issuable upon settlement of the 2018 forward sale agreement and 2019 forward sale agreement are reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of the Company’s common shares used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of common shares that would be issued upon full physical settlement of the applicable forward sale agreement over the number of common shares that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). If and when the Company physically or net share settles either forward sale agreement, the delivery of common shares would result in an increase in the number of shares outstanding and dilution to earnings per share. As of December 31, 2019, the Company has not settled any portion of the forward sale agreement.

Prior to the IPO, holders of Series B Preferred Shares were entitled to cumulative dividends, which were added to the reported net loss whether or not declared or paid to determine the net loss attributable to common shareholders under the two-class method.

A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the years ended December 31, 2019, 2018 and 2017 is as follows:



	Year ended December 31,
	2019	2018	2017
	(In thousands)
Weighted average common shares outstanding – basic	179,598	141,415	70,022
Dilutive effect of share-based awards	1,660	2,662	—
Equity forward contracts	2,692	261	—
Weighted average common shares outstanding – diluted	183,950	144,338	70,022

For the year ended December 31, 2017, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net loss. Consequently, the Company did not have any adjustments in these periods between basic and diluted loss per share related to stock options, restricted stock units, warrants and convertible preferred shares in this period.

The table below presents the weighted-average number of antidilutive potential common shares that are not considered in the calculation of diluted income (loss) per share:



	Year ended December 31,
	2019	2018	2017
	(In thousands)
Series B Convertible Preferred Stock	—	—	33,240
Common share warrants	—	—	18,575
Employee stock options	—	—	5,983
Restricted stock units	250	—	685
Equity forward contracts	—	—	—
	250	—	58,483