Quarterly report pursuant to Section 13 or 15(d)

EARNINGS PER SHARE

v3.2.0.727
EARNINGS PER SHARE
6 Months Ended
Jun. 30, 2015
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings (loss) per common share for the three and six months ended June 30, 2015 and 2014, respectively (in thousands, except per share amounts):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Earnings (loss) per common share - basic and diluted
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
Net income (loss)
$
93

 
$
(6,158
)
 
$
(2,678
)
 
$
(8,961
)
Net loss attributable to noncontrolling interests
3,371

 
6,158

 
6,142

 
8,961

Net income (loss) attributable to National Storage Affiliates Trust
3,464

 

 
3,464

 

Distributed and undistributed earnings allocated to participating securities
(3
)
 

 
(3
)
 

Net income (loss) attributable to common shareholders - basic
3,461

 

 
3,461

 

Effect of assumed conversion of dilutive securities
(3,371
)
 

 
(3,371
)
 

Net income (loss) attributable to common shareholders - diluted
$
90

 
$

 
$
90

 
$

 
 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
15,517

 
1

 
7,802

 
1

Effect of dilutive securities:
 
 
 
 
 
 
 
Weighted average OP units outstanding
20,208

 

 
10,104

 

Weighted average DownREIT OP unit equivalents outstanding
1,415

 

 
708

 

Weighted average LTIP units outstanding
1,247

 

 
624

 

Subordinated performance units and DownREIT subordinated performance unit equivalents
14,178

 

 
7,089

 

Weighted average shares outstanding - diluted
52,565

 
1

 
26,327

 
1

 
 
 
 
 
 
 
 
Earnings (loss) per share - basic
$
0.22

 
$

 
$
0.44

 
$

Earnings (loss) per share - diluted
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
As discussed in Note 3, the Company did not have an ownership interest or share in our operating partnership's profits and losses prior to the completion of the Company's initial public offering. As a result, all of our operating partnership's profits and losses for the period from January 1, 2015 to April 28, 2015 and the three and six months ended June 30, 2014 were allocated to noncontrolling interests.
Outstanding equity interests of our operating partnership and DownREIT partnerships are considered potential common shares for purposes of calculating diluted earnings (loss) per share as the unitholders may, through the exercise of redemption rights, obtain common shares, subject to various restrictions. Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by further adjusting for the dilutive impact using the treasury stock method for unvested LTIP units subject to a service condition outstanding during the period and the if-converted method for any convertible securities outstanding during the period.
One year from the completion of the initial public offering, OP units in our operating partnership are redeemable for cash or, at our option, exchangeable for common shares on a one-for-one basis, subject to certain adjustments and five years after the completion of the initial public offering or, in the case of DownREIT limited partnership agreements ("DownREIT LPAs") entered into after the initial public offering, five years after the date of the applicable DownREIT LPA, DownREIT OP units are redeemable for cash or, at our option, exchangeable for OP units in our operating partnership on a one-for-one basis, subject to certain adjustments in each case.
LTIP units may also, under certain circumstances, be convertible into OP units, which are exchangeable for common shares as described above. Certain LTIP units vested prior to or upon the completion of the Company's initial public offering and certain LTIP units will vest upon the satisfaction of a future service condition. Vested LTIP units and unvested LTIP units that vest based on a service condition are allocated income or loss in a similar manner as OP units. Unvested LTIP units subject to a service condition are evaluated for dilution using the treasury stock method. For the three and six months ended June 30, 2015, 398,817 unvested LTIP units that vest based on a service condition are excluded from the calculation of diluted earnings (loss) per share as they are not dilutive to earnings (loss) per share. In addition, certain LTIP units vest upon the future acquisition of properties sourced by PROs. For the three and six months ended June 30, 2015, 522,900 unvested LTIP units that vest upon the future acquisition of properties are excluded from the calculation of diluted earnings (loss) per share because the contingency for the units to vest has not been attained as of the end of the reported periods.
Subordinated performance units may also, under certain circumstances, be convertible into OP units which are exchangeable for common shares as described above, and DownREIT subordinated performance units may, under certain circumstances, be exchangeable for subordinated performance units on a one-for-one basis. Subordinated performance units are only convertible into OP units, beginning two years following the completion of the initial public offering and then (i) at the holder’s election only upon the achievement of certain performance thresholds relating to the properties to which such subordinated performance units relate or (ii) at our election upon a retirement event of a PRO that holds such subordinated performance units or upon certain qualifying terminations.
Although subordinated performance units and DownREIT subordinated performance units may only be convertible beginning two years following the completion of the initial public offering, we assume a hypothetical conversion of each subordinated performance unit (including each DownREIT subordinated performance unit) into OP units (with subsequently assumed redemption into common shares) for the purposes of calculating diluted weighted average common shares. This hypothetical conversion is calculated using historical financial information prior to the completion of the Company's initial public offering on April 28, 2015, and as a result, is not necessarily indicative of the subsequent results of operations, cash flows or financial position of the Company following the initial public offering or upon expiration of the two-year lock out period on conversions.
Participating securities, which consist of unvested restricted shares, receive dividends equal to those received by common shares. The effect of participating securities for the periods presented above is calculated using the two-class method of allocating distributed and undistributed earnings.