Our time-based 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 (“ASC 260”).

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.

Prior to the second quarter of 2019, 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 May 2, 2016 acquisition of PEG Bandwidth, LLC, was 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 provided Uniti the option to settle the instrument in cash or

shares. During the second quarter of 2019, the Company received notice from the holder of the Series A Shares of its election to convert all its shares, and the Company made an election to issue shares upon conversion. See Note 17. As a result, the earnings-per-share impact of the Series A Shares for three and six months ended June 30, 2019, is calculated by using the “if-converted” method.

The dilutive effect of the Exchangeable Notes (see Note 11) is calculated by using the “if-converted” method. This assumes an add-back of interest, net of income taxes, to net income attributable to shareholders as if the securities were converted at the beginning of the reporting period (or at time of issuance, if later) and the resulting common shares included in number of weighted average shares. The dilutive effect of the Warrants (see Note 9) is calculated using the treasury-stock method. During the three and six months ended June 30, 2019, the Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock for the reporting period.

The July 3, 2017 merger agreement for our acquisition of Hunt provides for the issuance of additional common shares upon the achievement of certain defined revenue milestones. See Note 7. The earnings per share impact of the Hunt Contingent Consideration is calculated under the method described in ASC 260 for the treatment of contingently issuable shares in weighted-average shares outstanding. On January 4, 2019, we settled the Hunt Contingent Consideration in full satisfaction of the obligation through the issuance of 645,385 common shares having a fair value of $11.2 million.

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

	Three Months Ended June 30,						Six Months Ended June 30,
(Thousands, except per share data)	2019			2018			2019			2018
Basic earnings per share:
Numerator:
Net income (loss) attributable to shareholders	$	38,717		$	(3,503	)	$	41,159		$	(2,293	)
Less: Income allocated to participating securities		(223	)		(400	)		(251	)		(869	)
Income allocated to participating securities on share settled contingent consideration arrangements		-			(258	)		-			(468	)
Dividends declared on convertible preferred stock		-			(656	)		(656	)		(1,312	)
Amortization of discount on convertible preferred stock		(248	)		(745	)		(993	)		(1,490	)
Net income (loss) attributable to common shares	$	38,246		$	(5,562	)	$	39,259		$	(6,432	)
Denominator:
Basic weighted-average common shares outstanding		182,971			175,011			182,597			174,951
Basic earnings (loss) per common share	$	0.21		$	(0.03	)	$	0.22		$	(0.04	)

	Three Months Ended June 30,						Six Months Ended June 30,
(Thousands, except per share data)	2019			2018			2019			2018
Diluted earnings per share:
Numerator:
Net income (loss) attributable to shareholders	$	38,717		$	(3,503	)	$	41,159		$	(2,293	)
Less: Income allocated to participating securities		(223	)		(400	)		(251	)		(869	)
Income allocated to participating securities on share settled contingent consideration arrangements		-			(258	)		-			(468	)
Dividends declared on convertible preferred stock		-			(656	)		(656	)		(1,312	)
Amortization of discount on convertible preferred stock		(248	)		(745	)		(993	)		(1,490	)
Impact on if-converted dilutive securities		363			-			1,764			-
Net income (loss) attributable to common shares	$	38,609		$	(5,562	)	$	41,023		$	(6,432	)
Denominator:
Basic weighted-average common shares outstanding		182,971			175,011			182,597			174,951
Effect of dilutive non-participating securities		8			-			8			-
Impact on if-converted dilutive securities		10,126			-			9,671			-
Weighted-average shares for dilutive earnings per common share		193,105			175,011			192,276			174,951
Dilutive earnings (loss) per common share	$	0.20		$	(0.03	)	$	0.21		$	(0.04	)

For the three and six months ended June 30, 2018, 563,492 non-participating securities and 619,581 potential common shares related to Hunt Contingent Consideration were excluded from the computation of diluted earnings per share, as their effect would have been anti-dilutive.