Earnings per Share and per Unit

12 Months Ended

Dec. 31, 2022

Note 11 — Earnings per Share and per Unit

AIR and the AIR Operating Partnership calculate basic earnings (loss) per common share and basic earnings (loss) per common unit, respectively, based on the weighted-average number of shares of Common Stock and common partnership units outstanding, respectively. We calculate diluted earnings (loss) per share and diluted earnings (loss) per unit taking into consideration dilutive Common Stock and common partnership unit equivalents and dilutive convertible securities outstanding during the period.

Our Common Stock and common partnership unit equivalents include: (i) options to purchase shares of Common Stock, which, if exercised, would result in AIR’s issuance of additional shares and the AIR Operating Partnership’s issuance to AIR of additional common partnership units equal to the number of shares purchased under the options; (ii) unvested total stockholder return (“TSR”) restricted stock awards that do not meet the definition of participating securities, which would result in an increase in the number of shares of Common Stock and common partnership units outstanding equal to the number of the shares that vest; and (iii) preferred OP Units, which may be redeemed at the holders’ option for cash or shares of Common Stock. Common partnership unit equivalents also include unvested long-term incentive partnership units. We include in the denominator securities with dilutive effect in calculating diluted earnings (loss) per share and per unit during these periods.

Our restricted stock awards that are subject to time-based vesting receive non-forfeitable dividends similar to shares of Common Stock and common partnership units prior to vesting. Our TSR long-term incentive partnership units receive non-forfeitable distributions based on specified percentages of the distributions paid to common partnership units prior to vesting and conversion. The unvested restricted shares and units related to these awards are participating securities. We include the effect of participating securities in basic and diluted earnings (loss) per share and unit computations using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method.

In our consolidated statements of operations, noncontrolling interests in consolidated real estate partnerships is related to both continuing and discontinued operations. For purposes of our earnings (loss) per share calculation, we have appropriately allocated the noncontrolling interests in consolidated real estate partnerships for all periods presented. Please refer to Note 14 for detail of noncontrolling interests in consolidated real estate partnerships associated with discontinued operations.

Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings (loss) per share and per unit for the years ended December 31, 2022, 2021, and 2020 are as follows (in thousands, except per share and per unit data):


	2022		2021		2020
Earnings (loss) per share
Numerator:
Income (loss) from continuing operations attributable to AIR common stockholders	$	903,642	$	447,124	$	(115,961	)
Income from discontinued operations attributable to AIR common stockholders		—		—		11,632
Basic net income (loss) attributable to AIR common stockholders	$	903,642	$	447,124	$	(104,329	)
Effect of dilutive instruments		6,388		—		—
Dilutive net income (loss) attributable to AIR common stockholders	$	910,030	$	447,124	$	(104,329	)

Denominator – shares:
Basic weighted-average common shares outstanding		154,093		154,135		122,446
Dilutive common share equivalents outstanding		2,494		368		—
Dilutive weighted-average common shares outstanding		156,587		154,503		122,446

Income (loss) from continuing operations attributable to AIR per common share	$	5.86	$	2.90	$	(0.94	)
Income from discontinued operations attributable to AIR per common share		—		—		0.09
Earnings (loss) per share – basic	$	5.86	$	2.90	$	(0.85	)
Earnings (loss) per share – diluted	$	5.81	$	2.89	$	(0.85	)

Earnings (loss) per unit
Numerator:
Income (loss) from continuing operations attributable to the AIR Operating Partnership	$	962,414	$	475,557	$	(121,399	)
Income from discontinued operations attributable to the AIR Operating Partnership		—		—		11,632
Basic net income (loss) attributable to the AIR Operating Partnership’s common unitholders	$	962,414	$	475,557	$	(109,767	)
Effect of dilutive instruments		6,388		—		—
Dilutive net income (loss) attributable to the AIR Operating Partnership’s common unitholders	$	968,802	$	475,557	$	(109,767	)

Denominator – units:
Basic weighted-average common units outstanding		164,141		162,739		128,775
Dilutive common unit equivalents outstanding		2,494		369		—
Dilutive weighted-average common units outstanding		166,635		163,108		128,775

Income (loss) from continuing operations attributable to the AIR Operating Partnership per common unit	$	5.86	$	2.92	$	(0.94	)
Income from discontinued operations attributable to the AIR Operating Partnership per common unit		—		—		0.09
Earnings (loss) per unit – basic	$	5.86	$	2.92	$	(0.85	)
Earnings (loss) per unit – diluted	$	5.81	$	2.92	$	(0.85	)

The number of common share equivalent securities excluded from the diluted earnings per share calculation were approximately 1.5 million for the year ended December 31, 2021, respectively. These securities, which include preferred OP Units redeemable for Common Stock, were excluded from the diluted earnings per share calculations as they are anti-dilutive. These securities were dilutive for the year ended December 31, 2022 and were included in the calculation of diluted earnings per share.