Earnings Per Common Share

3 Months Ended

Mar. 31, 2020

Earnings per Common Share

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 and OP 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 and OP units are unvested. During the three months ended March 31, 2020, the weighted-average number of restricted stock units and OP units that participated in the distribution of common dividends was 1,294,365, of which 644,214 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 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 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 the 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.

A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the three months ended March 31, 2020 and 2019 is as follows (in thousands):



	Three Months Ended March 31,
	2020	2019
Weighted average common shares outstanding – basic	200,707	149,404
Dilutive effect of share-based awards	1,283	—
Equity forward contract	1,793	—
Weighted average common shares outstanding – diluted	203,783	149,404

For the three months ended March 31, 2019, 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 and equity forward contract shares.

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:



	Three Months Ended March 31,
	2020	2019
	(In thousands)
Employee stock options	—	1,856
Restricted stock	244	1,493
OP units	—	—
Equity forward contract shares	—	6,000
	244	9,349