Annual report pursuant to Section 13 and 15(d)

Earnings Per Share of the Company

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Earnings Per Share of the Company
 12 Months Ended
Dec. 31, 2019
Tanger Factory Outlet Centers, Inc. [Member]  
Earnings Per Share of the Company Earnings Per Share of the Company

The following table sets forth a reconciliation of the numerators and denominators in computing earnings per share for the years ended December 31, 2019, 2018 and 2017 (in thousands, except per share amounts):
 
 
2019
 
2018
 
2017
Numerator
 
 
 
 
 
 
Net income attributable to Tanger Factory Outlet Centers, Inc.
 
$
87,855

 
$
43,655

 
$
68,002

Less allocation of earnings to participating securities
 
(1,336
)
 
(1,211
)
 
(1,209
)
Net income available to common shareholders of Tanger Factory Outlet Centers, Inc.
 
$
86,519

 
$
42,444

 
$
66,793

Denominator
 
 
 
 
 
 
Basic weighted average common shares
 
92,808

 
93,309

 
94,506

Effect of outstanding options and certain restricted common shares
 
—

 
1

 
16

Diluted weighted average common shares
 
92,808

 
93,310

 
94,522

Basic earnings per common share:
 
 
 
 
 
 
Net income
 
$
0.93

 
$
0.45

 
$
0.71

Diluted earnings per common share:
 
 
 
 
 
 
Net income
 
$
0.93

 
$
0.45

 
$
0.71



We determine diluted earnings per share based on the weighted average number of common shares outstanding combined with the incremental weighted average shares that would have been outstanding assuming all potentially dilutive securities were converted into common shares at the earliest date possible. There were no material securities which had a dilutive effect on earnings per common share for the years ended December 31, 2019 and 2018.

Notional units granted under our equity compensation plan are considered contingently issuable common shares and are included in earnings per share if the effect is dilutive using the treasury stock method and the common shares would be issuable if the end of the reporting period were the end of the contingency period. For the years ended December 31, 2019, 2018, and 2017, approximately 1.1 million, 1.0 million and 603,000 units were excluded from the computation, respectively, because these units would not have been issuable if the end of the reporting period were the end of the contingency period or because they were anti-dilutive.

With respect to outstanding options, the effect of dilutive common shares is determined using the treasury stock method whereby outstanding options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such options and the average measured but unrecognized compensation cost during the period are assumed to be used to repurchase our common shares at the average market price during the period. For the years ended December 31, 2019, 2018 and 2017, approximately 523,000, 535,000 and 169,000 options were excluded from the computation, respectively, as they were anti-dilutive. The assumed exchange of the partnership units held by the Non-Company LPs as of the beginning of the year, which would result in the elimination of earnings allocated to the noncontrolling interest in the Operating Partnership, would have no impact on earnings per share since the allocation of earnings to a common limited partnership unit, as if exchanged, is equivalent to earnings allocated to a common share.

Certain of the Company's unvested restricted common share awards contain non-forfeitable rights to dividends or dividend equivalents. The impact of these unvested restricted common share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted common share awards based on dividends declared and the unvested restricted common shares' participation rights in undistributed earnings. Unvested restricted common shares that do not contain non-forfeitable rights to dividends or dividend equivalents are included in the diluted earnings per share computation if the effect is dilutive, using the treasury stock method.