Note 10. Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period including participating securities (restricted shares that have non-forfeitable rights to receive dividends issued pursuant to the Company’s share-based compensation program are considered participating securities). Unvested restricted shares that are participating securities are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the common shareholders. For the three months ended September 30, 2018 and 2017, the Company had 2.2 million and 3.8 million, respectively, of weighted average unvested restricted shares outstanding that were participating securities. For the nine months ended September 30, 2018 and 2017, the Company had 3.3 million and 3.8 million, respectively, of weighted average unvested restricted shares outstanding that were participating securities. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three and nine months ended September 30, 2018 and 2017:

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Numerator
Net income (loss)	$	6,305,000		$	6,417,000		$	(378,000	)	$	13,973,000
Preferred stock dividends		(2,688,000	)		(3,535,000	)		(8,175,000	)		(10,739,000	)
Preferred stock redemptions costs		-			(7,890,000	)		(3,507,000	)		(7,890,000	)
Net (income) attributable to noncontrolling interests		(145,000	)		(117,000	)		(353,000	)		(371,000	)
Net earnings allocated to unvested shares		(108,000	)		(190,000	)		(520,000	)		(564,000	)
Net income (loss) attributable to vested common shares	$	3,364,000		$	(5,315,000	)	$	(12,933,000	)	$	(5,591,000	)
Denominator
Weighted average number of vested common shares outstanding, basic		89,049,000			85,642,000			88,228,000			83,049,000
Assumed vesting of market performance-based restricted stock units		826,000			-			-			-
Weighted average number of vested common shares outstanding, diluted		89,875,000			85,642,000			88,228,000			83,049,000

Net income (loss) per common share attributable to common shareholders, basic	$	0.04		$	(0.06	)	$	(0.15	)	$	(0.07	)

Net income (loss) per common share attributable to common shareholders, diluted	$	0.04		$	(0.06	)	$	(0.15	)	$	(0.07	)

Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. For the three months ended September 30, 2018, fully-diluted EPS reflects the restricted stock units that would have been issuable under the Company’s President and CEO market performance-based equity award (see Note 9 – “Share-Based Compensation”) had the measurement period ended on September 30, 2018, whereas for the nine months ended September 30, 2018, these shares were excluded as they were anti-dilutive. For 2017, the 5,750,000 common shares that were subject to a forward sale agreements have been excluded from the denominator prior to their issuance on August 1, 2017, as they were anti-dilutive using the treasury stock method. Net income/loss attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and the related OP Units have been excluded from the denominator for the purpose of calculating diluted EPS as there would have been no dilutive effect had such amounts been included. The weighted average number of OP Units outstanding were 469,000 and 349,000 for the three months ended September 30, 2018 and 2017, respectively, and 388,000 and 350,000 for the nine months ended September 30, 2018 and 2017, respectively.