Earnings Per Share

3 Months Ended

Mar. 31, 2023

13. Earnings Per Share

Earnings per share ("EPS") 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 EPS using the more dilutive of the treasury stock method and the two-class method for stock option and restricted common shares, the treasury stock method for forward equity sales and the if converted method for convertible units.

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 unless there is a physical settlement. Common shares issued upon the physical settlement of the forward equity sales agreements, weighted for the period these common shares are outstanding, are 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 in accordance with the treasury stock method.

Our potentially dilutive securities include our 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 J preferred OP units, Series K preferred OP units and Aspen preferred OP Units, which, if converted or exercised, may impact dilution.

Diluted EPS considers the impact of potentially dilutive securities except when the potential common shares have an anti-dilutive effect. Our unvested restricted stock common shares contain rights to receive non-forfeitable distributions and participate equally with common stock with respect to distributions issued or declared, and thus, are participating securities, requiring the two-class method of computing EPS. 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 two-class method determines EPS by (1) dividing the sum of distributed earnings allocated to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares of common stock outstanding for the period; and (2) dividing the sum of distributed earnings allocated to participating securities and undistributed earnings allocated to participating securities by the weighted average number of shares of participating securities for the period. The remaining potential dilutive common shares do not contain rights to distributions and are included in the computation of diluted EPS.

Computations of basic and diluted EPS were as follows (in millions, except for per share data):


	Three Months Ended
	March 31, 2023		March 31, 2022
Numerator
Net income / (loss) attributable to SUI common shareholders	$	(30.1)	$	0.7
Less: allocation to restricted stock awards	(0.1)		—
Basic earnings - net income / (loss) attributable to common shareholders after allocation to restricted stock awards	$	(30.0)	$	0.7
Add: allocation to restricted stock awards	(0.1)		—

Add: allocation to common and preferred OP units dilutive effect	(0.6)		—
Diluted earnings - net income / (loss) attributable to common shareholders after allocation to common and preferred OP units	$	(30.7)	$	0.7


Denominator
Weighted average common shares outstanding	123.3		115.3
Add: common shares dilutive effect: Forward Equity Offering	—		0.2

Add: dilutive restricted stock	0.4		0.4
Add: common and preferred OP units dilutive effect	2.5		—
Diluted weighted average common shares and securities	126.2		115.9
EPS Available to Common Shareholders After Allocation
Basic earnings / (loss) per share	$	(0.24)	$	0.01
Diluted earnings / (loss) per share	$	(0.24)	$	0.01

We have excluded certain convertible securities from the computation of diluted EPS 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 EPS as of March 31, 2023 and 2022 (in thousands):


	As of
	March 31, 2023	March 31, 2022
Common OP units	—	2,551
A-1 preferred OP units	208	272
A-3 preferred OP units	40	40
Aspen preferred OP units	989	1,284
Series C preferred OP units	306	306
Series D preferred OP units	489	489
Series E preferred OP units	80	85
Series F preferred OP units	90	90
Series G preferred OP units	240	241
Series H preferred OP units	581	581
Series I preferred OP units(1)	N/A	922
Series J preferred OP units	239	240
Series K preferred OP units	1,000	N/A

Total Securities	4,262	7,101

(1) All of our outstanding Series I preferred OP units converted during the year ended December 31, 2022.