Earnings Per Common Share

6 Months Ended

Jun. 30, 2017

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. As of June 30, 2017, the shares of common stock underlying 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 13 for information regarding the Pay-for-Performance program.

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 six months ended June 30, 2017 and 2016, the diluted weighted average number of shares of common stock includes 113,584 and 107,000 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. For the three and six months ended June 30, 2017 and 2016, these amounts include (i) 100,000 and 100,000 shares, respectively, issuable upon satisfaction of a total stockholder return metric and (ii) 13,584 and 7,000 shares, respectively, issuable upon satisfaction of a return on capital metric.

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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Numerator for basic and diluted earnings per share:
Net income	$	9,993		$	12,459		$	12,879		$	15,743
Less net income attributable to non-controlling interests	(21		)	(18		)	(42		)	(16		)
Less earnings allocated to unvested restricted stock (a)	(332		)	(436		)	(533		)	(554		)

Net income available for common stockholders, basic and diluted	$	9,640		$	12,005		$	12,304		$	15,173


Denominator for basic earnings per share:
Weighted average common shares	17,824			16,579			17,788			16,484
Effect of diluted securities:
Restricted stock units awarded under Pay-for-Performance program	114			107			114			107
Denominator for diluted earnings per share:

Weighted average shares	17,938			16,686			17,902			16,591


Earnings per common share, basic	$	.54		$	.72		$	.69		$	.92

Earnings per common share, diluted	$	.54		$	.72		$	.69		$	.91


Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests	$	9,972		$	12,441		$	12,837		$	15,727

(a)

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