Earnings Per Share

3 Months Ended

Mar. 31, 2020

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 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, unvested time-based performance unit awards and unvested restricted stock units (“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:


	Three Months Ended March 31,
	2020		2019
Numerator:
Basic net income (loss) available to common stockholders	$	10,777	$	(39,392)
Effect of dilutive instruments	108		—
Diluted net income (loss) available to common stockholders	$	10,885	$	(39,392)
Denominator:
Basic weighted average common shares outstanding	154,432,602		154,396,159
Effect of dilutive instruments⁽¹⁾	3,677,310		—
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	158,109,912		154,396,159
Basic earnings (loss) per common share	$	0.07	$	(0.26)
Diluted earnings (loss) per common share	$	0.07	$	(0.26)

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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 operating partnership calculates basic earnings per unit 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 unit 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 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 operating partnership’s basic and diluted earnings per unit for net income available to common unitholders:


	Three Months Ended March 31,
	2020		2019
Numerator:
Basic and diluted net income (loss) available to common unitholders	$	10,840	$	(39,577)
Denominator:
Basic weighted average common units outstanding	155,344,460		155,120,144
Effect of dilutive instruments⁽¹⁾	2,156,773		—
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING	157,501,233		155,120,144
Basic earnings (loss) per common unit	$	0.07	$	(0.26)
Diluted earnings (loss) per common unit	$	0.07	$	(0.26)

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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.