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 the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each 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, 2016 and 2015, the diluted weighted average number of shares of common stock includes 117,000 and 100,000 shares, respectively (of an aggregate of 200,000 shares) of common stock underlying the restricted stock units awarded pursuant to the Pay-For-Performance program. These amounts include 100,000 shares that would be issued pursuant to a metric based on the market price and dividends paid at the end of each quarterly period, assuming the end of that quarterly period was the end of the vesting period. Of the remaining 100,000 shares of common stock underlying the restricted stock units awarded under the Pay-For-Performance program (the “ROC Shares”), 17,000 shares are included in the diluted weighted average in the three and nine months ended September 30, 2016 and, as the return on capital performance metric was not satisfied during the three and nine months ended September 30, 2015, none of the ROC Shares were included in 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,
	2016			2015			2016			2015
Numerator for basic and diluted earnings per share:
Net income	$	4,323		$	3,791		$	20,067		$	16,712
Less net income attributable to non-controlling interests	(24		)	(3		)	(40		)	(1,386		)
Less earnings allocated to unvested restricted stock (a)	(248		)	(210		)	(744		)	(631		)

Net income available for common stockholders, basic and diluted	$	4,051		$	3,578		$	19,283		$	14,695


Denominator for basic earnings per share:
Weighted average common shares	16,845			16,014			16,605			15,892
Effect of diluted securities:
Restricted stock units awarded under Pay-for-Performance program	117			100			117			100

Denominator for diluted earnings per share:

Weighted average shares	16,962			16,114			16,722			15,992


Earnings per common share, basic	$	.24		$	.22		$	1.16		$	.92

Earnings per common share, diluted	$	.24		$	.22		$	1.15		$	.92


Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests	$	4,299		$	3,788		$	20,027		$	15,326

(a)

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