Earnings Per Share

9 Months Ended

Sep. 30, 2021

Hudson Pacific Properties, Inc.

The Company calculates basic earnings per share using the two-class method by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Unvested time-based restricted stock awards, unvested time-based performance unit awards and unvested restricted stock units (“RSUs”) that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company calculates diluted earnings per share using the two-class method or the treasury stock and if-converted method, whichever results in more dilution. For the three and nine months ended months ended September 30, 2021 and 2020, both methods of calculation yielded the same diluted earnings per share amount. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Basic net (loss) income available to common stockholders	$	(9,295)	$	(5,436)	$	(1,998)	$	8,859
Effect of dilutive instruments	—		—		—		92
Diluted net (loss) income available to common stockholders	$	(9,295)	$	(5,436)	$	(1,998)	$	8,951
Denominator:
Basic weighted average common shares outstanding	152,320,252		153,196,007		151,443,305		153,643,278
Effect of dilutive instruments(1)	—		—		—		2,387,537
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	152,320,252		153,196,007		151,443,305		156,030,815
Basic earnings per common share	$	(0.06)	$	(0.04)	$	(0.01)	$	0.06
Diluted earnings per common share	$	(0.06)	$	(0.04)	$	(0.01)	$	0.06

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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 or performance 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 using the two-class method by dividing the net income available to common unitholders for the period by the weighted average number of common units outstanding during the period. Unvested time-based restricted stock awards, unvested time-based performance unit awards and unvested RSUs that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per unit pursuant to the two-class method. The operating partnership calculates diluted earnings per unit using the two-class method or the treasury stock and if-converted method, whichever results in more dilution. For the three and nine months ended September 30, 2021 and 2020, both methods of calculation yielded the same diluted earnings per unit amount. Diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units, where such exercise or conversion would result in a lower earnings per unit amount.

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Basic and diluted net (loss) income available to common unitholders	$	(9,380)	$	(5,642)	$	(2,014)	$	8,489
Denominator:
Basic weighted average common units outstanding	153,701,876		154,107,865		152,818,720		154,555,136
Effect of dilutive instruments(1)	—		—		—		867,000
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING	153,701,876		154,107,865		152,818,720		155,422,136
Basic earnings per common unit	$	(0.06)	$	(0.04)	$	(0.01)	$	0.05
Diluted earnings per common unit	$	(0.06)	$	(0.04)	$	(0.01)	$	0.05

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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 or performance 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.