Earnings Per Share

Hudson Pacific Properties, Inc.

The Company calculates basic earnings per share by dividing the net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Hudson Pacific Properties, Inc. calculates diluted earnings per share by dividing the diluted net income (loss) available to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method or the if-converted method, whichever is more dilutive. Unvested time-based RSUs and unvested OPP awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method.

The following table reconciles the numerator and denominator in computing the Company’s basic and diluted earnings per share for net income (loss) available to common stockholders:



	For the Year Ended December 31,
	2017		2016		2015
Numerator:
Basic net income (loss) available to common stockholders	$	67,587	$	27,218	$	(16,397	)
Effect of dilutive instruments	—		451		—
Diluted net income (loss) available to common stockholders	$	67,587	$	27,669	$	(16,397	)
Denominator:
Basic weighted average common shares outstanding	153,488,730		106,188,902		85,927,216
Effect of dilutive instruments⁽¹⁾	394,084		4,180,153		—
Diluted weighted average common shares outstanding	153,882,814		110,369,055		85,927,216
Basic earnings per common share	$	0.44	$	0.26	$	(0.19	)
Diluted earnings per common share	$	0.44	$	0.25	$	(0.19	)

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(1)	The Company includes unvested awards and convertible common units as contingently issuable shares in the computation of diluted earnings per share once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per share calculation.

Hudson Pacific Properties, L.P.

The operating partnership calculates basic earnings per share by dividing the net income available to common unitholders for the period by the weighted average number of common units outstanding during the period. The operating partnership calculates diluted earnings per share by dividing the diluted net income available to common unitholders for the period by the weighted average number of common units and dilutive instruments outstanding during the period using the treasury stock method or the if-converted method, whichever is more dilutive. Unvested time-based RSUs and unvested OPP awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per unit pursuant to the two-class method.

The following table reconciles the numerator and denominator in computing the operating partnership’s basic and diluted earnings per unit for net income (loss) available to common unitholders:



	For the Year Ended December 31,
	2017		2016		2015
Numerator:
Basic net income (loss) available to common unitholders	$	67,962	$	33,066	$	(38,366	)
Effective of dilutive instruments	—		451		—
Diluted net income (loss) available to common unitholders	$	67,962	$	33,517	$	(38,366	)
Denominator:
Basic weighted average common units outstanding	154,276,773		145,595,246		128,948,077
Effect of dilutive instruments⁽¹⁾	394,084		1,144,000		—
Diluted weighted average common units outstanding	154,670,857		146,739,246		128,948,077
Basic earnings per common unit	$	0.44	$	0.23	$	(0.30	)
Diluted earnings per common unit	$	0.44	$	0.23	$	(0.30	)

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(1)	The operating partnership includes unvested awards as contingently issuable units in the computation of diluted earnings per unit once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per unit calculation.