Net Income (Loss) Per Share Attributable to Class A Common Shareholders

6 Months Ended

Jun. 30, 2020

Net Income (Loss) Per Share Attributable to Class A Common Shareholders

6. NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and six months ended June 30, 2020 and 2019 are presented below.

	Three Months Ended June 30,							Six Months Ended June 30,
(dollars in thousands, except per share amounts)	2020				2019			2020			2019
Numerator:
Net income (loss) attributable to holders of shares of Class A common stock—basic	$	(5,732	)		$	29,459		$	19,398		$	43,029
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units				(a)			(a)			(a)			(a)
Net income (loss) attributable to holders of shares of Class A common stock—diluted	$	(5,732	)		$	29,459		$	19,398		$	43,029
Denominator:
Weighted average shares of Class A common stock outstanding—basic		56,130,614				50,107,269			54,449,690			48,919,127
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units				(a)			(a)			(a)			(a)
Weighted average number of incremental shares issuable from unvested restricted stock, RSUs and stock options, as calculated using the treasury stock method		—		(b)(c)		4,560,818	(b)		3,912,810	(b)		5,851,725	(b)
Weighted average shares of Class A common stock outstanding—diluted		56,130,614				54,668,087			58,362,500			54,770,852
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	(0.10	)		$	0.59		$	0.36		$	0.88
Diluted	$	(0.10	)		$	0.54		$	0.33		$	0.79

We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.

(a)

Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable lock-up, vesting and transfer restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 67,805,780 and 67,701,355 for the three months ended June 30, 2020 and 2019, respectively, and 70,679,094 and 67,783,254 for the six months ended June 30, 2020 and 2019, respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units (including any tax impact). For the three and six months ended June 30, 2020 and 2019, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

(b)

Certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended June 30, 2020 and 2019, there were 2,647,641 and 2,500,362 RSUs, respectively, that would have been included in the treasury stock method calculation if the effect were dilutive and 2,038,792 and 1,789,991 units for the six months ended June 30, 2020 and 2019, respectively.

(c)

The Company has a loss for the three months ended June 30, 2020, resulting in antidilution when additional shares of the Company’s Class A common stock are assumed issued pursuant to the treasury stock method. As a result, there were 2,978,213 shares per the treasury stock method related to unvested RSUs that were excluded from the denominator in the calculation of diluted net income (loss) per share for the three months ended June 30, 2020. If such shares were included, diluted Class A common stock outstanding would be 59,108,827 for the three months ended June 30, 2020.