Earnings Per Share

3 Months Ended

Mar. 31, 2017

Note 10. Earnings Per Share

Our restricted stock awards are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as common stock. As participating securities, we included these instruments in the computation of earnings per share under the two-class method described in FASB ASC 260, Earnings per Share.

We also have outstanding performance-based restricted stock units that contain forfeitable rights to receive dividends. Therefore, the awards are considered non-participating restrictive shares and are not dilutive under the two-class method until performance conditions are met.

The earnings per share impact of the Company’s 3% Convertible Preferred Stock, $0.0001 par value (“Series A Shares”), issued in connection with the acquisition of PEG Bandwidth, LLC, is calculated using the net share settlement method, whereby the redemption value of the instrument is assumed to be settled in cash and only the conversion premium, if any, is assumed to be settled in shares. The Series A Shares provide Uniti the option to cash or share settle the instrument, and it is our policy to settle the instrument in cash upon conversion.

The following sets forth the computation of basic and diluted earnings per share under the two-class method:


	Three Months Ended March 31,
(Thousands, except per share data)	2017			2016
Basic earnings per share:
Numerator:
Net (loss) income	$	(20,000	)	$	8,036
Less: Income allocated to participating securities		(387	)		(355	)
Dividends declared on convertible preferred stock		(656	)		-
Amortization of discount on convertible preferred stock		(745	)		-
Net (loss) income applicable to common shares	$	(21,788	)	$	7,681
Denominator:
Basic weighted-average common shares outstanding		155,184			149,918
Basic (loss) earnings per common share	$	(0.14	)	$	0.05


	Three Months Ended March 31,
(Thousands, except per share data)	2017			2016
Diluted earnings per share:
Numerator:
Net (loss) income	$	(20,000	)	$	8,036
Less: Income allocated to participating securities		(387	)		(355	)
Dividends declared on convertible preferred stock		(656	)		-
Amortization of discount on convertible preferred stock		(745	)		-
Net (loss) income applicable to common shares	$	(21,788	)	$	7,681
Denominator:
Basic weighted-average common shares outstanding		155,184			149,918
Effect of dilutive non-participating securities		-			66
Weighted-average shares for dilutive earnings per common share		155,184			149,984
Dilutive (loss) earnings per common share	$	(0.14	)	$	0.05

For the three months ended March 31, 2017, 382,019 non-participating securities were excluded from the computation of diluted earnings per share, as their effect would have been anti-dilutive.