Earnings per share

Prior to the consummation of the Pace Business Combination, our Preferred Shares and their related accumulated Non-cash PIK Dividends were participating securities. If a dividend was declared or paid on our Predecessor’s ordinary shares, holders of our Predecessor’s ordinary shares and Preferred Shares were entitled to proportionate shares of such dividend, with the holders of our Predecessor's Preferred Shares participating on an as-if converted basis.

Under the two-class method, basic earnings (losses) per share (“EPS”) attributable to ordinary shareholders is computed by dividing the net income (loss) attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Net income (loss) attributable to ordinary shareholders is determined by allocating undistributed earnings between ordinary and preferred shareholders. For periods in which there are undistributed losses, there is no allocation of undistributed earnings to preferred shareholders.

Diluted EPS attributable to ordinary shareholders is computed by using the more dilutive result of the two-class method, the if-converted method or the treasury stock method. The if-converted method uses the weighted-average number of ordinary shares outstanding during the period, including potentially dilutive ordinary shares assuming the conversion of the outstanding Preferred Shares of our Predecessor, as of the first day of the reporting period. The dilutive effect of awards under our equity compensation plan is reflected in diluted earnings per share by application of the treasury stock method.

Under the two-class method, the number of shares used in the computation of diluted losses per share is the same as that used for the computation of basic earnings per share for participating securities, as the result would be anti-dilutive. The net income attributable to ordinary shareholders is not allocated to the Preferred Shares until all other reserves have been exhausted or such loss cannot be covered in any other way.

The calculations of basic and diluted EPS are as follows ($ in thousands, except share data):



	Year Ended December 31,
	2018		2017			2016
Numerator:
Net income (loss)	$	18,977	$	(241	)	$	20,216
Non-cash dividend to warrant holders	—		(879		)	—
Convertible Preferred Share dividends	—		(7,922		)	(43,676		)
Allocation of undistributed earnings to preferred shareholders ⁽¹⁾	—		—			—
Numerator for basic EPS - earnings (loss) available to ordinary shareholders	18,977		(9,042		)	(23,460		)
Add back convertible Preferred Share dividends ⁽¹⁾	—		—			—
Add back of undistributed earnings to preferred shareholders ⁽¹⁾	—		—			—
Numerator for diluted EPS - earnings (loss) available to ordinary shareholders after assumed conversions	$	18,977	$	(9,042	)	$	(23,460	)
Denominator:
Denominator for basic EPS - weighted-average shares	122,150,851		96,896,498			50,481,822
Effect of dilutive securities:
Unvested restricted share awards	267,649		—			—
Convertible Preferred Shares	—		—			—
Denominator for diluted EPS - adjusted weighted-average shares	122,418,500		96,896,498			50,481,822
EPS - Basic	$	0.16	$	(0.09	)	$	(0.46	)
EPS - Diluted	$	0.16	$	(0.09	)	$	(0.46	)

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⁽¹⁾For the years ended December 31, 2017 and 2016, no undistributed earnings were allocated to the preferred shareholders of our Predecessor as we had undistributed losses after deducting Preferred Share dividends of our Predecessor from net income. For the years ended December 31, 2017 and 2016, Preferred Share dividends of our Predecessor of $7.9 million and $43.7 million, respectively, were not added back for purposes of calculating diluted EPS because the effect of treating our Predecessor's Preferred Shares as if they had been converted to their 7,898,432 and 40,652,679 ordinary share equivalents as of January 1, 2017 and 2016 respectively, was anti-dilutive.

For the years ended December 31, 2018 and 2017, 9,482 and 1,265,830 of unvested restricted share awards, respectively, were not included in the computation of diluted EPS as their effect would have been anti-dilutive.

For the years ended December 31, 2018 and 2017, 523,545 and 265,222 of unvested performance-based equity awards, respectively, were not included in the computation of diluted EPS after assumed conversions as the performance criteria were not met as of the end of the reporting period.

For the years ended December 31, 2018 and 2017, outstanding Earnout Warrants to acquire a total of 2,987,770 and 3,000,000 ordinary shares, respectively, were not included in the computation of diluted EPS after assumed conversions because the warrants were not exercisable as of the end of the reporting period.