RLJ Lodging TrustRLJ

RLJ Lodging Trust Earnings Per Share Disclosure

10-KFiled Feb 27, 20262 min read
Earnings per Common Share
 
Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period excluding the weighted-average number of unvested restricted shares and unvested performance units outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period, plus any shares that could potentially be outstanding during the period. The potential shares consist of the unvested restricted share grants and unvested performance units, calculated using the treasury stock method, and convertible Series A Preferred Shares, calculated using the if-converted method. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation.
 
Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating shares and are considered in the computation of earnings per share pursuant to the two-class method. If there were any undistributed earnings allocable to the participating shares, they would be deducted from net income attributable to common shareholders used in the basic and diluted earnings per share calculations.
  
The limited partners’ outstanding OP Units (which may be redeemed for common shares under certain circumstances) have been excluded from the diluted earnings per share calculation as there was no effect on the amounts for the years ended December 31, 2025, 2024 and 2023, since the limited partners’ share of income or loss would also be added back to net income attributable to common shareholders.
 
The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data): 
 For the year ended December 31,
 202520242023
Numerator:  
Net income attributable to RLJ$28,509 $68,021 $76,405 
Less: Preferred dividends(25,115)(25,115)(25,115)
Less: Dividends paid on unvested restricted shares(1,177)(895)(882)
Less: Undistributed earnings attributable to unvested restricted shares— — — 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares$2,217 $42,011 $50,408 
Denominator:  
Weighted-average number of common shares - basic149,662,774 152,856,036 155,928,663 
Unvested restricted shares167,420 481,666 538,023 
Unvested performance units81,884 138,219 89,728 
Weighted-average number of common shares - diluted149,912,078 153,475,921 156,556,414 
Net income per share attributable to common shareholders - basic$0.01 $0.27 $0.32 
Net income per share attributable to common shareholders - diluted$0.01 $0.27 $0.32 

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2019Feb 26, 2020
2018Mar 1, 2019
2017Feb 28, 2018

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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