Earnings Per Share

12 Months Ended

Dec. 31, 2018

Hudson Pacific Properties, Inc.

The Company calculates basic earnings per share by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. The Company 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 restricted stock awards and unvested OPP RSUs 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 available to common stockholders:


	For the Year Ended December 31,
	2018		2017		2016
Numerator:
Basic net income available to common stockholders	$	98,090	$	67,587	$	27,218
Effect of dilutive instruments	—		—		451
Diluted net income available to common stockholders	$	98,090	$	67,587	$	27,669
Denominator:
Basic weighted average common shares outstanding	155,445,247		153,488,730		106,188,902
Effect of dilutive instruments⁽¹⁾	251,239		394,084		4,180,153
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	155,696,486		153,882,814		110,369,055
Basic earnings per common share	$	0.63	$	0.44	$	0.26
Diluted earnings per common share	$	0.63	$	0.44	$	0.25

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1.The Company includes unvested awards and convertible common and participating 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 Company 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 Company 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 restricted stock awards, unvested time-based performance unit awards and unvested OPP RSUs 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 Company’s basic and diluted earnings per unit for net income available to common unitholders:


	For the Year Ended December 31,
	2018		2017		2016
Numerator:
Basic and diluted net income available to common unitholders	$	98,448	$	67,962	$	33,066
Effective of dilutive instruments	—		—		451
Diluted net income available to common unitholders	$	98,448	$	67,962	$	33,517
Denominator:
Basic weighted average common units outstanding	156,014,292		154,276,773		145,595,246
Effect of dilutive instruments⁽¹⁾	251,239		394,084		1,144,000
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING	156,265,531		154,670,857		146,739,246
Basic earnings per common unit	$	0.63	$	0.44	$	0.23
Diluted earnings per common unit	$	0.63	$	0.44	$	0.23

_____________

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.