EARNINGS PER SHARE AND UNIT

Urban Edge Earnings per Share

We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of Urban Edge common shares and participating securities is calculated according to dividends declared and participating rights in undistributed earnings. Restricted shares issued pursuant to our share-based compensation program are considered participating securities, and as such have non-forfeitable rights to receive dividends.

The computation of diluted EPS reflects potential dilution of securities by adding potential common shares, including stock options and unvested restricted shares, to the weighted average number of common shares outstanding for the period. For the year ended December 31, 2018, 2017 and 2016, there were options outstanding for 4,750,549, 2,603,664, and 2,472,284 shares, respectively, that potentially could be exercised for common shares. During the years ended December 31, 2017 and 2016, respectively 167,933 and 256,917 options with exercise prices ranging from $22.83 to $28.36, were included in the diluted EPS calculation as their option prices were lower than the average market prices of our common shares. During the year ended December 31, 2018, no options were included in the diluted EPS calculation as their exercise prices were higher than the average market prices of our common shares. In addition, as of December 31, 2018 there were 162,577 unvested restricted shares outstanding that potentially could become unrestricted common shares. The computation of diluted EPS for the years ended December 31, 2018, 2017 and 2016 included the 188,329, 167,100, and 114,354 weighted average unvested restricted shares outstanding, respectively, as their effect is dilutive.

The effect of the redemption of OP and vested LTIP units is not reflected in the computation of basic and diluted earnings per share, as they are redeemable for common shares on a one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests in the accompanying consolidated financial statements. As such, the assumed redemption of these units would have no net impact on the determination of diluted earnings per share since they would be anti-dilutive.

The following table sets forth the computation of our basic and diluted earnings per share:



	Year Ended December 31,
(Amounts in thousands, except per share amounts)	2018			2017			2016
Numerator:
Net income attributable to common shareholders	$	105,150		$	67,070		$	90,815
Less: Earnings allocated to unvested participating securities	(184		)	(155		)	(114		)
Net income available for common shareholders - basic	$	104,966		$	66,915		$	90,701
Impact of assumed conversions:
OP and LTIP units	—			5,782			53
Net income available for common shareholders - dilutive	$	104,966		$	72,697		$	90,754

Denominator:
Weighted average common shares outstanding - basic	113,863			107,132			99,364
Effect of dilutive securities:
Stock options using the treasury stock method	—			168			257
Restricted share awards	188			167			114
Assumed conversion of OP and LTIP units	—			10,923			59
Weighted average common shares outstanding - diluted	114,051			118,390			99,794

Earnings per share available to common shareholders:
Earnings per common share - Basic	$	0.92		$	0.62		$	0.91
Earnings per common share - Diluted	$	0.92		$	0.61		$	0.91

Operating Partnership Earnings per Unit

The following table sets forth the computation of basic and diluted earnings per unit:



	Year Ended December 31,
(Amounts in thousands, except per unit amounts)	2018			2017			2016
Numerator:
Net income attributable to unitholders	$	116,918		$	72,894		$	96,627
Less: net income attributable to participating securities	(200		)	(155		)	(211		)
Net income available for unitholders	$	116,718		$	72,739		$	96,416

Denominator:
Weighted average units outstanding - basic	126,198			117,779			105,455
Effect of dilutive securities issued by Urban Edge	188			335			371
Unvested LTIP units	—			276			273
Weighted average units outstanding - diluted	126,386			118,390			106,099

Earnings per unit available to unitholders:
Earnings per unit - Basic	$	0.92		$	0.62		$	0.91
Earnings per unit - Diluted	$	0.92		$	0.61		$	0.91