EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2020

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of our common shares of beneficial interest (“common shares”) outstanding during the period. We have issued restricted stock units (“RSUs”) and incentive stock options ("ISOs") under our 2015 Incentive Plan and Series D Convertible Preferred Units ("Series D preferred units"), which could have a dilutive effect on our earnings per share upon exercise of the RSUs or ISOs or upon conversion of the Series D preferred units (refer to Note 4 for further discussion of the Series D preferred units). Other than the issuance of RSUs, ISOs, and Series D preferred units, we have no outstanding options, warrants, convertible stock or other contractual obligations requiring issuance of additional shares that would result in dilution of earnings. Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”). Upon the exercise of Exchange Rights, and in our sole discretion, we may issue common shares in exchange for Units on a one-for-one basis.

Performance-based RSUs of 27,964 and 37,625 for the three months ended June 30, 2020 and 2019, respectively, and 27,964 and 37,625 for the six months ended June 30, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

For the three months ended June 30, 2020 and 2019, Series D preferred units of 228,000 and, for the six months ended June 30, 2020 and 2019, Series D preferred units of 228,000 and 157,000, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the three months ended June 30, 2020 and 2019, RSUs of 13,000 and 14,000, respectively, and, for the six months ended June 30, 2020 and 2019, RSUs of 15,000 and 11,000, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

Stock options of 63,527 and 31,764 for the three and six months ended June 30, 2020, respectively, were excluded from the calculation of diluted earnings per share because the assumed proceeds per share plus the average unearned compensation were greater than the average market price of common shares for the periods ended and, therefore were anti-dilutive.

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019:



	(in thousands, except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
NUMERATOR
Net income (loss) attributable to controlling interests	$	(3,803	)	$	3,113		$	(10,810	)	$	(1,585	)
Dividends to preferred shareholders	(1,609		)	(1,706		)	(3,314		)	(3,411		)
Redemption of preferred shares	25			—			298			—
Numerator for basic earnings (loss) per share – net income available to common shareholders	(5,387		)	1,407			(13,826		)	(4,996		)
Noncontrolling interests – Operating Partnership	(447		)	148			(1,139		)	(595		)
Dividends to preferred unitholders	160			160			320			217
Numerator for diluted earnings (loss) per share	$	(5,674	)	$	1,715		$	(14,645	)	$	(5,374	)
DENOMINATOR
Denominator for basic earnings per share weighted average shares	12,280			11,729			12,192			11,746
Effect of redeemable operating partnership units	1,037			1,226			1,047			1,306
Denominator for diluted earnings per share	13,317			12,955			13,239			13,052

NET EARNINGS (LOSS) PER COMMON SHARE – BASIC	$	(0.44	)	$	0.11		$	(1.13	)	$	(0.43	)

NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED	$	(0.44	)	$	0.11		$	(1.13	)	$	(0.43	)