Earnings Per Share

9 Months Ended

Sep. 30, 2020


10. EARNINGS PER SHARE

We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Income (Loss) Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.

OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents, and have the potential to be exchanged for an equal number of shares of our common stock in accordance with the terms of the the Partnership Agreement.

The impact of outstanding OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP units’ participation rights in undistributed earnings. The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements during the nine months ended September 30, 2020 and 2019.

The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income (loss) attributable to stockholders - basic	$	11,784	$	(25,877)	$	15,965	$	(67,642)
Net income (loss) attributable to convertible OP units(1)	1,646		(3,893)		2,251		(10,319)
Net income (loss) - diluted	$	13,430	$	(29,770)	$	18,216	$	(77,961)
Denominator:
Weighted-average shares - basic	290,465		283,827		290,295		282,714
OP units(1)	42,742		42,783		42,792		43,356
Dilutive restricted stock awards	356		—		393		—
Adjusted weighted-average shares - diluted	333,563		326,610		333,480		326,070
Earnings per common share:
Basic and diluted income (loss) per share	$	0.04	$	(0.09)	$	0.05	$	(0.24)

(1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option. The Operating Partnership income or loss attributable to these OP units, which is included as a component of Net (Income) Loss Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all years presented.

Approximately 1.0 million time-based and 2.5 million performance-based unvested stock units were outstanding as of September 30, 2019. These securities were anti-dilutive for the three and nine months ended September 30, 2019, and as a result, their impact was excluded from the weighted-average common shares used to calculate diluted EPS for those periods.