Earnings per Common Share

6 Months Ended

Jun. 30, 2023

Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period excluding the weighted-average number of unvested restricted shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period, plus any shares that could potentially be outstanding during the period. The potential shares consist of the unvested restricted share grants and unvested performance units, calculated using the treasury stock method, and convertible Series A Preferred Shares,

calculated using the if-converted method. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation.

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating shares and are considered in the computation of earnings per share pursuant to the two-class method. If there were any undistributed earnings allocable to the participating shares, they would be deducted from net income attributable to common shareholders used in the basic and diluted earnings per share calculations.

The limited partners’ outstanding OP units (which may be redeemed for common shares under certain circumstances) have been excluded from the diluted earnings per share calculation as there was no effect on the amounts for the three and six months ended June 30, 2023 and 2022, since the limited partners’ share of income would also be added back to net income attributable to common shareholders.

The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data):


	For the three months ended June 30,				For the six months ended June 30,
	2023		2022		2023		2022
Numerator:
Net income attributable to RLJ	$	41,395	$	32,966	$	52,040	$	17,718
Less: Preferred dividends	(6,279)		(6,279)		(12,557)		(12,557)
Less: Dividends paid on unvested restricted shares	(197)		(24)		(399)		(50)
Less: Undistributed earnings attributable to unvested restricted shares	(351)		(368)		(219)		(27)
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	34,568	$	26,295	$	38,865	$	5,084

Denominator:
Weighted-average number of common shares - basic	156,424,444		163,539,446		157,945,406		163,857,785
Unvested restricted shares	316,743		245,127		435,974		359,365

Weighted-average number of common shares - diluted	156,741,187		163,784,573		158,381,380		164,217,150

Net income per share attributable to common shareholders - basic	$	0.22	$	0.16	$	0.25	$	0.03

Net income per share attributable to common shareholders - diluted	$	0.22	$	0.16	$	0.25	$	0.03