Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Numerator:
Net income	$	2,009		$	3,061		$	27,585		$	17,330
Less: Preferred stock dividends	(1,322		)	(661		)	(3,966		)	(661		)
Less: Net income attributable to noncontrolling interests	(21		)	(63		)	(684		)	(533		)
Less: Net income attributable to participating securities	(80		)	(70		)	(327		)	(223		)
Net income attributable to common stockholders	$	586		$	2,267		$	22,608		$	15,913
Add back: Net income attributable to noncontrolling interests	—			63			—			—
Numerator for diluted net income attributable to common stockholders	$	586		$	2,330		$	22,608		$	15,913

Denominator:
Weighted average shares of common stock outstanding – basic	72,621,219			65,707,476			68,984,047			61,694,835
Effect of dilutive securities - performance units	446,862			286,697			380,808			225,141
Effect of dilutive securities - operating partnership units	—			1,991,004			—			—
Weighted average shares of common stock outstanding – diluted	73,068,081			67,985,177			69,364,855			61,919,976

Earnings per share — Basic
Net income attributable to common stockholders	$	0.01		$	0.03		$	0.33		$	0.26
Earnings per share — Diluted
Net income attributable to common stockholders	$	0.01		$	0.03		$	0.33		$	0.26

Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. As such, unvested shares of restricted stock, unvested LTIP Units and unvested Performance Units are considered participating securities. Participating securities are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and each participating security according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings. Participating securities are also included in the computation of diluted EPS using the more dilutive of the two-class method or treasury stock method for unvested shares of restricted stock and LTIP Units, and by determining if certain market conditions have been met at the reporting date for unvested Performance Units.

The effect of including unvested shares of restricted stock and unvested LTIP Units using the treasury stock method was excluded from our calculation of weighted average shares of common stock outstanding – diluted, as their inclusion would have been anti-dilutive.

Performance Units, which are subject to vesting based on the Company outperforming certain absolute and relative TSR levels over a three-year performance period, are included as contingently issuable shares in the calculation of diluted EPS when TSR has been achieved at or above the threshold levels specified in the award agreements, assuming the reporting period is the end of the performance period, and the effect is dilutive. As of September 30, 2017, for the performance awards granted in 2015, the Company’s TSR performance relative to a designated peer group was above the 75th percentile, or the maximum level, and the Company’s absolute TSR was above 75%, or the maximum level. As of September 30, 2017, for the performance awards granted in 2016, the Company’s TSR performance relative to a designated peer group was above the 75th percentile, or the maximum level, and the Company’s absolute TSR was approximately 30%, which is between the threshold and target levels. The corresponding number of dilutive securities have been included in the computation of the weighted average diluted shares above, since they were more dilutive than using the two-class method of computing EPS.

We also consider the effect of other potentially dilutive securities, including OP Units, which may be redeemed for shares of our common stock under certain circumstances, and include them in our computation of diluted EPS when their inclusion is dilutive.