Earnings Per Share

9 Months Ended

Sep. 30, 2020

EARNINGS PER SHARE

The Company uses the two-class method in its computation of earnings per share. Pursuant to the terms of the Holding Company’s Second Amended and Restated Limited Liability Company Agreement, the Class A common shares and the Class B common shares are entitled to receive distributions at different rates, with each Class B common share receiving 0.03% of the distributions paid on each Class A common share. Under the two-class method, the Company’s net income available to common shareholders is allocated between the two classes of common shares on a fully-distributed basis and reflects residual net income after amounts attributed to noncontrolling interests. In the event of a net loss, the Company determined that both classes share in the Company’s losses, and they share in the losses using the same mechanism as the distributions. The Company also has restricted share awards and performance restricted share awards (see Note 15) that have a right to non-forfeitable dividends while unvested and are contemplated as participating when the Company is in a net income position. These awards participate in distributions on a basis equivalent to other Class A common shares but do not participate in losses.

No distributions were declared for the three and nine months ended September 30, 2020 and 2019. The Company operated in a net income and net loss position for the three and nine months ended September 30, 2020, respectively. The Company operated in a net loss and net income position for the three and nine months ended September 30, 2019, respectively. As a result, net income (loss) attributable to the parent was allocated to the Class A common shares and Class B common shares in an amount per Class B common share equal to 0.03% multiplied by the amount per Class A common share. Basic income (loss) per Class A common share is determined by dividing net income (loss) allocated to Class A Common shareholders by the weighted average number of Class A common shares outstanding for the period. Basic income (loss) per Class B common share is determined by dividing net income (loss) allocated to the Class B common shares by the weighted average number of Class B common shares outstanding during the period.

Diluted income (loss) per share calculations for both Class A common shares and Class B common shares contemplate adjustments to the numerator and the denominator under the if-converted method for the convertible Class B common shares, the exchangeable Class A units of the San Francisco Venture and the exchangeable Class A Common Units of the Operating Company. The Company uses the treasury stock method or the two-class method when evaluating dilution for RSUs, restricted shares, and performance restricted shares. The more dilutive of the two methods is included in the calculation for diluted income (loss) per share.

The following table summarizes the basic and diluted earnings per share calculations for the three and nine months ended September 30, 2020 and 2019 (in thousands, except shares and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income (loss) attributable to the Company	$	16,964	$	(10,663)	$	(1,210)	$	2,633
Adjustments to net income (loss) attributable to the Company	—		209		40		27
Net income (loss) attributable to common shareholders	$	16,964	$	(10,454)	$	(1,170)	$	2,660
Numerator—basic common shares:
Net income (loss) attributable to common shareholders	$	16,964	$	(10,454)	$	(1,170)	$	2,660
Less: net income allocated to participating securities	$	567	$	—	$	—	$	114
Allocation of net income (loss) among common shareholders	$	16,397	$	(10,454)	$	(1,170)	$	2,546
Numerator for basic net income (loss) available to Class A common shareholders	$	16,392	$	(10,451)	$	(1,170)	$	2,545
Numerator for basic net income (loss) available to Class B common shareholders	$	5	$	(3)	$	—	$	1
Numerator—diluted common shares:
Net income (loss) attributable to common shareholders	$	16,964	$	(10,454)	$	(1,170)	$	2,660
Reallocation of income (loss) to Company upon assumed exchange of units	$	18,693	$	—	$	(46)	$	3,028
Less: net income allocated to participating securities	$	567	$	—	$	—	$	114
Allocation of net income (loss) among common shareholders	$	35,090	$	(10,454)	$	(1,216)	$	5,574
Numerator for diluted net income (loss) available to Class A common shareholders	$	35,085	$	(10,451)	$	(1,216)	$	5,573
Numerator for diluted net income (loss) available to Class B common shareholders	$	5	$	(3)	$	—	$	1
Denominator:
Basic weighted average Class A common shares outstanding	66,746,065		66,276,694		66,709,190		66,248,431
Diluted weighted average Class A common shares outstanding	142,866,245		66,276,694		68,848,283		145,456,670
Basic weighted average Class B common shares outstanding	79,233,544		79,275,234		79,233,544		79,204,883
Diluted weighted average Class B common shares outstanding	79,233,544		79,275,234		79,233,544		79,276,016
Basic income (loss) per share:
Class A common shares	$	0.25	$	(0.16)	$	(0.02)	$	0.04
Class B common shares	$	0.00	$	(0.00)	$	(0.00)	$	0.00
Diluted income (loss) per share:
Class A common shares	$	0.25	$	(0.16)	$	(0.02)	$	0.04
Class B common shares	$	0.00	$	(0.00)	$	(0.00)	$	0.00

Anti-dilutive potential RSUs	—		36,289		—		—
Anti-dilutive potential Performance RSUs	338,813		388,155		338,813		388,155
Anti-dilutive potential Restricted Shares (weighted average)	—		2,238,054		1,717,022		—
Anti-dilutive potential Performance Restricted Shares (weighted average)	—		776,312		701,039		—
Anti-dilutive potential Class A common shares (weighted average)	3,137,134		79,299,016		76,120,180		—