Earnings Per Share

12 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE

The Company uses the two-class method in its computation of earnings per share. Pursuant to the terms of the Five Point Holdings, LLC Agreement, the Class A common shares and the Class B common shares are entitled to receive distributions at different rates, with each Class B common share receiving 0.03% of the distributions paid on each Class A common share. Under the two-class method, the Company’s net income available to common shareholders is allocated between the two classes of common shares on a fully-distributed basis and reflects residual net income after amounts attributed to noncontrolling interests. In the event of a net loss, the Company determined that both classes of common shares share in the Company’s losses, and they share in the losses using the same mechanism as the distributions. For the years ended December 31, 2018 and 2017, the Company is operating in a net loss and net income position, respectively. No distributions were declared for either periods, as such, net losses and income attributable to the parent were allocated to the Class A common shares and Class B common shares at an amount per Class B common share equal to 0.03% multiplied by the amount per Class A common share. Basic income or loss per Class A common share is determined by dividing net income or loss allocated to Class A Common shareholders by the weighted average number of Class A common shares outstanding for the period. Basic income or loss per Class B common share is determined by dividing net income or loss allocated to the Class B common shares by the weighted average number of Class B common shares outstanding during the period.

Diluted income or loss per share calculations for both Class A common shares and Class B common shares contemplate adjustments to the numerator and the denominator under the if-converted method for the convertible Class B common shares, the exchangeable Class A Units of the San Francisco Venture and Class A Common Units of the Operating Company, and the treasury stock method for RSUs and restricted shares, and are included in the calculation if determined to be dilutive.

The following table summarizes the basic and diluted earnings per share/unit calculations for the years ended December 31, 2018, 2017 and 2016 (in thousands, except unit/shares and per unit/share amounts):



	2018			2017			2016
Numerator:
Net (loss) income attributable to the Company	$	(34,714	)	$	73,235		$	(33,266	)
Adjustments to net (loss) income attributable to the Company	221			(750		)	(505		)
Net (loss) income attributable to common shareholders	$	(34,493	)	$	72,485		$	(33,771	)
Numerator—basic common shares:
Net (loss) income attributable to common shareholders	$	(34,493	)	$	72,485		$	(33,771	)
Net income (loss) allocable to participating securities	$	—		$	(506	)	$	—
Allocation of net (loss) income among common shareholders	$	(34,493	)	$	71,979		$	(33,771	)
Numerator for basic net (loss) income available to Class A Common Shareholders/Unitholders	$	(34,480	)	$	71,947		$	(33,755	)
Numerator for basic net (loss) income available to Class B Common Shareholders	$	(13	)	$	32		(16		)
Numerator—diluted common shares:
Net (loss) income attributable to common shareholders	$	(34,493	)	$	72,485		$	(33,771	)
Reallocation of (loss) income to Company upon assumed exchange of common units	$	—		$	(48,289	)	$	—
Net (loss) income allocated to participating securities	$	—		$	(69	)	$	—
Allocation of net (loss) income among common shareholders	$	(34,493	)	$	24,127		$	(33,771	)
Numerator for diluted net (loss) income available to Class A Common Shareholders/Unitholders	$	(34,480	)	$	24,123		$	(33,755	)
Numerator for diluted net (loss) income available to Class B Common Shareholders	$	(13	)	$	4		$	(16	)
Denominator:
Basic weighted average Class A common shares outstanding	65,002,387			54,006,954			37,795,447
Diluted weighted average Class A common shares outstanding	65,002,387			133,007,828			37,795,447
Basic and diluted weighted average Class B common shares outstanding	79,859,730			78,821,553			49,547,050
Basic (loss) earnings per share/unit:
Class A common shares/Unit	$	(0.53	)	$	1.33		$	(0.89	)
Class B common shares	$	(0.00	)	$	0.00		$	(0.00	)
Diluted (loss) earnings per share/unit:
Class A common shares/Unit	$	(0.53	)	$	0.18		$	(0.89	)
Class B common shares	$	(0.00	)	$	0.00		$	(0.00	)

Anti-dilutive potential RSUs	72,579			—			1,304,804
Anti-dilutive potential restricted shares (weighted average)	1,817,020			—			—
Anti-dilutive potential Class A common shares/Units (weighted average)	79,883,687			—			53,826,230

In January 2019, the Company granted 2.3 million restricted shares and RSUs to employees and non-employee directors (see Note 16). With the termination of the Retail Project in early 2019 (see Note 10), the Company issued 436,498 Class A Units of the San Francisco Venture to affiliates of Lennar and Castlelake.