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Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

21. Earnings per Share

Basic net income (loss) per common share attributable to Archrock common stockholders is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share attributable to Archrock common stockholders is determined by dividing net income (loss) attributable to Archrock common stockholders, after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as they do not have a contractual obligation to participate in our undistributed losses.

Diluted net income (loss) per common share attributable to Archrock common stockholders is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would be anti-dilutive.

The following table shows the calculation for net income (loss) attributable to Archrock common stockholders, which is used in the calculation of basic and diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands):


		Year Ended December 31,
		2020			2019			2018
Income (loss) from continuing operations attributable to Archrock stockholders		$	(68,445)		$	97,603		$	21,063
Loss from discontinued operations, net of tax			—			(273)			—
Net income (loss) attributable to Archrock stockholders			(68,445)			97,330			21,063
Less: Earnings attributable to participating securities			(1,338)			(1,348)			(815)
Net income (loss) attributable to Archrock common stockholders		$	(69,783)		$	95,982		$	20,248

The following table shows the potential shares of common stock that were included in computing diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands):


		Year Ended December 31,
		2020		2019		2018
Weighted average common shares outstanding including participating securities		152,827		139,317		110,843
Less: Weighted average participating securities outstanding		(1,999)		(1,825)		(1,538)
Weighted average common shares outstanding used in basic net income (loss) per common share		150,828		137,492		109,305
Net dilutive potential common shares issuable:
On exercise of options and vesting of performance-based restricted stock units		—		34		111
On settlement of ESPP shares		—		2		5
Weighted average common shares outstanding used in diluted net income (loss) per common share		150,828		137,528		109,421

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share attributable to Archrock common stockholders as their inclusion would have been anti-dilutive (in thousands):


		Year Ended December 31,
		2020		2019		2018
On exercise of options where exercise price is greater than average market value for the period		96		154		195
On exercise of options and vesting of performance-based restricted stock units		54		—		—
On settlement of ESPP shares		17		—		—
Net dilutive potential common shares issuable		167		154		195