Earnings Per Share and Weighted-Average Shares Outstanding

6 Months Ended

Jun. 30, 2023

Earnings Per Share and Weighted-Average Shares Outstanding

U.S. GAAP guidance — Earnings (Loss) Per Share provides guidance on the computation and presentation of earnings (loss) per share. Basic EPS excludes dilution and is computed by dividing Net income 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 were entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and was 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):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic earnings per share:
Net income available to common stockholders	$	6,429	$	48,519	$	(3,921)	$	48,881
Basic weighted-average shares of common stock outstanding	173,939		183,948		173,254		186,401
Basic earnings per share	$	0.04	$	0.26	$	(0.02)	$	0.26

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):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022			2023		2022
Fully diluted earnings per share:
Net income available to common stockholders	$	6,429	$	48,519		$	(3,921)	$	48,881
Allocations of net income to limited partnership interests in Newmark Holdings, net of tax	2,421		14,860			—		14,567
Net income for fully diluted shares	$	8,850	$	63,379		$	(3,921)	$	63,448
Weighted-average shares:
Common stock outstanding	173,939		183,948			173,254		186,401


Partnership units (1)	69,633		58,917			—		57,576
RSUs (Treasury stock method)	879		3,067			—		4,475
Newmark exchange shares	503		2,053			—		2,006
Fully diluted weighted-average shares of common stock outstanding	244,954		247,985			173,254		250,458
Fully diluted earnings per share	$	0.04	$	0.26		$	(0.02)	$	0.25

(1)Partnership units collectively include FPUs, limited partnership units, and Cantor Units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

For the three and six months ended June 30, 2023, 5.8 million and 74.1 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive. For the three and six months ended June 30, 2022, 0.6 million and 0.8 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive.