Note 3 - Earnings Per Common Share

Basic earnings per share was determined by dividing net income allocable to common stockholders for each period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock outstanding during the applicable period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. Unvested restricted stock is not allocated net losses and/or any excess of dividends declared over net income; such amounts are allocated entirely to the common stockholders, other than the holders of unvested restricted stock. The restricted stock units awarded under the Pay-for-Performance program are excluded from the basic earnings per share calculation, as these units are not participating securities (see Note 14).

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company. For the three and nine months ended September 30, 2015 and 2014, the diluted weighted average number of shares of common stock includes 100,000 shares (of an aggregate of 200,000 shares) of common stock underlying the restricted stock units awarded pursuant to the Pay-For-Performance program. These 100,000 shares may vest upon satisfaction of the total stockholder return metric. The number of shares that would be issued pursuant to this metric is based on the market price and dividends paid as of the end of each quarterly period assuming the end of that quarterly period was the end of the vesting period. The remaining 100,000 shares of common stock underlying the restricted stock units awarded under the Pay-For-Performance program are not included during the three and nine months ended September 30, 2015 and 2014, as they did not meet the return on capital performance metric during such periods.

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Numerator for basic and diluted earnings per share:
Income from continuing operations	$	3,791		$	2,647		$	16,712		$	10,596
Less net income attributable to non-controlling interests	(3		)	(27		)	(1,386		)	(76		)
Less earnings allocated to unvested restricted stock (a)	(210		)	(178		)	(631		)	(534		)

Income from continuing operations available for common stockholders	3,578			2,442			14,695			9,986
Discontinued operations	—			—			—			13

Net income available for common stockholders, basic and diluted	$	3,578		$	2,442		$	14,695		$	9,999


Denominator for basic earnings per share: — weighted average common shares	16,014			15,650			15,892			15,508
Effect of diluted securities: — restricted stock units awarded under Pay-for-Performance program	100			100			100			100

Denominator for diluted earnings per share — weighted average shares	16,114			15,750			15,992			15,608


Earnings per common share, basic	$	.22		$	.16		$	.92		$	.64

Earnings per common share, diluted	$	.22		$	.16		$	.92		$	.64


Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests:
Income from continuing operations	$	3,788		$	2,620		$	15,326		$	10,520
Income from discontinued operations	—			—			—			13


Net income attributable to One Liberty Properties, Inc.	$	3,788		$	2,620		$	15,326		$	10,533

Represents an allocation of distributed earnings to unvested restricted stock, which as participating securities, are entitled to receive dividends.