12. Earnings per share of QTS Realty Trust, Inc.

Basic income per share is calculated by dividing the net income attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income per share adjusts basic income per share for the effects of potentially dilutive common shares. Unvested restricted stock awards contain non-forfeitable rights to dividends and thus are participating securities and are included in the computation of earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. Accordingly, service-based restricted stock awards were included in the calculation of earnings per share using the two-class method for all periods presented.

The computation of basic and diluted net income per share is as follows (in thousands, except per share data, and unaudited):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net income (loss)	$	(6,892)	$	7,394	$	(13,577)	$	17,570
Loss (income) attributable to noncontrolling interests		1,610		(887)		2,641		(2,146)
Preferred stock dividends		(7,045)		—		(9,621)		—
Earnings attributable to participating securities		(206)		(203)		(743)		(650)
Net income (loss) available to common stockholders after allocation of participating securities	$	(12,533)	$	6,304	$	(21,300)	$	14,774
Denominator:
Weighted average shares outstanding - basic		50,469		48,714		50,401		47,862
Effect of Class A partnership units		—		6,669		—		6,744
Effect of Class O units and options to purchase Class A common stock on an "as if" converted basis		—		788		—		799
Weighted average shares outstanding - diluted		50,469		56,171		50,401		55,405

Basic net income (loss) per share	$	(0.25)	$	0.13	$	(0.42)	$	0.31

Diluted net income (loss) per share	$	(0.25)	$	0.13	$	(0.42)	$	0.31

Note: The table above does not include Class A partnership units of 6.7 million and 6.8 million for the three months ended September 30, 2018 and 2017, respectively, 0.4 million reflecting the effects of Class O units and options to purchase common stock on an "as if" converted basis for the three months ended September 30, 2018, and 6.7 million reflecting the effects of Series B Convertible preferred stock on an “as if” converted basis for the three months ended September 30, 2018, as their respective inclusion would have been antidilutive. The table above does not include Class A partnership units of 6.6 million and 6.8 million for the nine months ended September 30, 2018 and 2017, respectively, 0.4 million reflecting the effects of Class O units and options to purchase common stock on an "as if" converted basis for the nine months ended September 30, 2018, and 2.4 million reflecting the effects of Series B Convertible preferred stock on an “as if” converted basis for the nine months ended September 30, 2018, as their respective inclusion would have been antidilutive.