Earnings Per Share and Weighted-Average Shares Outstanding

12 Months Ended

Dec. 31, 2019

Earnings Per Share and Weighted-Average Shares Outstanding

U.S. GAAP guidance — Earnings Per Share provides guidance on the computation and presentation of earnings per share (“EPS”). Basic EPS excludes dilution and is computed by dividing Net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income (loss) is allocated to Newmark’s outstanding common stock, FPUs, limited partnership units and Cantor units (See Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”). In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 are entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and is a reduction to net income available to common stockholders for the calculation of Newmark’s basic earnings per share and fully diluted earnings per share.

The following is the calculation of Newmark’s basic EPS (in thousands, except per share data):



	Year Ended December 31,
	2019		2018		2017
Basic earnings per share:
Net income available to common stockholders ⁽¹⁾	$	104,406	$	101,641	$	144,492
Basic weighted-average shares of common stock outstanding	177,774		157,256		133,413
Basic earnings per share	$	0.59	$	0.65	$	1.08


⁽¹⁾	Includes a reduction for dividends on preferred stock or units in the amount of $12.9 million and $5.1 million for the years ended December 31, 2019 and December 31, 2018.

Fully diluted EPS is calculated utilizing net income available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator. The denominator comprises Newmark’s weighted-average number of outstanding shares of Newmark common stock to the extent the related units are dilutive and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, stock options

and RSUs. The limited partnership interests generally are potentially exchangeable into shares of Newmark Class A common stock and are entitled to remaining earnings after the deduction for the Preferred Distribution; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data):



	Year Ended December 31,
	2019		2018		2017 ⁽¹⁾
Fully diluted earnings per share:
Net income available to common stockholders	$	104,406	$	101,641	$	144,492
Allocations of net income (loss) to limited partnership interests in Newmark Holdings, net of tax	3,754		3,930		(27,275		)
Net income for fully diluted shares	$	108,160	$105,571		$117,217
Weighted-average shares:
Common stock outstanding	177,774		157,256		133,413
Partnership units ⁽²⁾	5,583		5,717		4,725
RSUs (Treasury stock method)	1,290		187		237
Newmark exchange shares	369		650		23
Fully diluted weighted-average shares of common stock outstanding	185,016		163,810		138,398
Fully diluted earnings per share	$	0.58	$0.64		$0.85


⁽¹⁾	Allocations of Net income (loss) to limited partnership interests in Newmark Holdings, net of tax consist solely of losses relating to the post-IPO period.


⁽²⁾	Partnership units collectively include founding/working partner units, limited partnership units, and Cantor and BGC units (See Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

For the years ended December 31, 2019 and 2018, 84.5 million and 95.2 million potentially dilutive securities were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the year ended December 31, 2019 included 83.8 million limited partnership units and 0.7 million RSUs. Anti-dilutive securities for the year ended December 31, 2018 included only limited partnership units. For the year ended December 31, 2017, there were no potentially dilutive securities that would have had an anti-dilutive effect.