Earnings per Common Share

3 Months Ended

Mar. 31, 2024

Basic earnings per common share is calculated by dividing net (loss) 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 and unvested performance units outstanding during the period. Diluted earnings per common share is calculated by dividing net (loss) 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 (loss) 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 months ended

March 31, 2024 and 2023, since the limited partners’ share of income would also be added back to net (loss) 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 March 31,
		2024		2023
Numerator:
Net income attributable to RLJ		$	4,937	$	10,645
Less: Preferred dividends		(6,279)		(6,279)
Less: Dividends paid on unvested restricted shares		(250)		(202)

Net (loss) income attributable to common shareholders excluding amounts attributable to unvested restricted shares		$	(1,592)	$	4,164

Denominator:
Weighted-average number of common shares - basic		152,970,215		159,483,268
Unvested restricted shares		—		568,125
Unvested performance units		—		92,355
Weighted-average number of common shares - diluted		152,970,215		160,143,748

Net (loss) income per share attributable to common shareholders - basic		$	(0.01)	$	0.03

Net (loss) income per share attributable to common shareholders - diluted		$	(0.01)	$	0.03