Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. We calculate diluted earnings per share using the more dilutive of the treasury stock method and the two-class method.

From time to time, we enter into forward equity sales agreements, which are discussed in Note 9, "Equity and Temporary Equity," We considered the potential dilution resulting from the forward equity sales agreements on the EPS calculations. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. The common shares issued upon the settlement of the forward equity sales agreements, weighted for the period these common shares are outstanding, are usually included in the denominator of basic EPS. To determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the number of weighted-average shares outstanding - diluted.

Our potentially dilutive securities include potential common shares related to our forward equity offerings, our unvested restricted common shares, and our Operating Partnership outstanding common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units, Series J preferred OP units and Aspen preferred OP Units, which, if converted or exercised, may impact dilution.

Diluted earnings per share considers the impact of potentially dilutive securities except when the potential common shares have an antidilutive effect. Our unvested restricted stock common shares contain rights to receive non-forfeitable dividends and participate equally with common stock with respect to dividends issued or declared, and thus, are participating securities, requiring the two-class method of computing earnings per share. The two-class method determines earnings per share by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average number of shares outstanding during the period. The remaining potential dilutive common shares do not contain rights to dividends and are included in the computation of diluted earnings per share.

Computations of basic and diluted earnings per share were as follows (in thousands, except per share data):


	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Numerator
Net Income Attributable to Sun Communities, Inc. Common Stockholders	$	110,770	$	58,910	$	135,552	$	42,824
Less: allocation to restricted stock awards	691		340		829		128
Basic earnings - Net Income attributable to common stockholders after allocation to restricted stock awards	$	110,079	$	58,570	$	134,723	$	42,696
Add: allocation to restricted stock awards	—		—		—		128
Add: allocation to common equity	—		—		3,142		—
Diluted earnings - Net Income attributable to common stockholders after allocation to restricted stock awards(1)	$	110,079	$	58,570	$	137,865	$	42,824


Denominator
Weighted average common shares outstanding	112,082		95,859		110,007		94,134

Add: dilutive stock options	—		1		—		1
Add: dilutive restricted stock	—		—		—		390
Add: common equity	—		—		2,586		—
Diluted weighted average common shares and securities(1)	112,082		95,860		112,593		94,525
Earnings Per Share Available to Common Stockholders After Allocation
Basic earnings per share	$	0.98	$	0.61	$	1.22	$	0.45
Diluted earnings per share(1)	$	0.98	$	0.61	$	1.22	$	0.45

(1) For the three and six months ended June 30, 2021, and the three months ended June 30, 2020, diluted earnings per share was calculated using the two-class method as the application of this method resulted in a more dilutive earnings per share for those periods.

We have excluded certain convertible securities from the computation of diluted earnings per share because the inclusion of those securities would have been anti-dilutive for the periods presented. The following table presents the outstanding securities that were excluded from the computation of diluted earnings per share as of June 30, 2021 and 2020 (in thousands):


	Six Months Ended
	June 30, 2021		June 30, 2020
Common OP units	2,569	(1)	2,477
A-1 preferred OP units	703		300
A-3 preferred OP units	75		40

Aspen preferred OP units	395		1,284

Series C preferred OP units	340		310
Series D preferred OP units	391		489
Series E preferred OP units	62		90
Series F preferred OP units	56		90
Series G preferred OP units	155		—
Series H preferred OP units	355		—
Series I preferred OP units	562		—
Series J preferred OP units	145		—
Total Securities	5,808		5,080

(1) For the six months ended June 30, 2021, Common OP units were excluded from the computation of diluted earnings per share because the inclusion of those securities would have been anti-dilutive for the period.