EQUITY AND EARNINGS PER SHARE (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Equity [Abstract] |
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| Schedule of amounts used in computing basic and diluted EPS |
The Company is required to present both basic and diluted earnings per share (“EPS”). The following table shows the amounts used in computing basic and diluted EPS:
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For Year Ended December 31, |
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2019 |
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2018 |
|
2017 |
Numerator for basic and diluted earnings per share: |
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Loss from continuing operations after preferred dividends |
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$ |
(60,434 |
) |
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$ |
(44,263 |
) |
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$ |
(47,781 |
) |
Loss Applicable to Common Stockholders |
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$ |
(60,434 |
) |
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$ |
(44,263 |
) |
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$ |
(47,781 |
) |
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Denominator: |
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Denominator for basic earnings per share - weighted average shares |
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67,039,556 |
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66,993,543 |
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66,903,457 |
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Effect of dilutive securities |
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Options |
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— |
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— |
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— |
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RSUs |
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— |
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— |
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— |
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Denominator for diluted earnings per share - adjusted weighted average shares |
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67,039,556 |
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66,993,543 |
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66,903,457 |
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Basic earnings per share: |
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Loss from continuing operations per share of common stock after preferred dividends |
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$ |
(0.90 |
) |
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$ |
(0.66 |
) |
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$ |
(0.71 |
) |
Loss Applicable to Common Stock, per share |
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$ |
(0.90 |
) |
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$ |
(0.66 |
) |
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$ |
(0.71 |
) |
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Diluted earnings per share: |
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Loss from continuing operations per share of common stock after preferred dividends |
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$ |
(0.90 |
) |
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$ |
(0.66 |
) |
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$ |
(0.71 |
) |
Loss Applicable to Common Stock, per share |
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$ |
(0.90 |
) |
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$ |
(0.66 |
) |
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$ |
(0.71 |
) |
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| Schedule of outstanding options |
The following is a summary of the changes in the Company's outstanding options for the year ended December 31, 2019.
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Number of Options |
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Weighted Average Strike Price |
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Weighted Average Life Remaining (in years) |
Balance at December 31, 2018 |
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8,436,931 |
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$ |
3.72 |
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Granted |
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695,652 |
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4.66 |
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Forfeited (A) |
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(2,234,237 |
) |
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5.44 |
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Balance at December 31, 2019 |
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6,898,346 |
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$ |
3.26 |
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3.4 years |
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Exercisable at December 31, 2019 |
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4,744,696 |
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$ |
3.26 |
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2.5 years |
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| Schedule of outstanding options summary |
The Company's outstanding options were summarized as follows:
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Year Ended December 31, |
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2019 |
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2018 |
Held by the former Manager |
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3,627,245 |
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2,705,253 |
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Granted to the former Manager and subsequently transferred to certain Manager’s employees (B) |
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1,382,998 |
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2,304,990 |
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Granted to the independent directors |
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333 |
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333 |
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Granted to Drive Shack employees (A)(C) |
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1,887,770 |
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3,426,355 |
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Total |
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6,898,346 |
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8,436,931 |
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(A) |
In 2019, in connection with the former CEO's retirement, the related option awards were modified to accelerate the vesting of 1,117,118 options, subject to a 90-day exercise period which expired on February 9, 2020. The former CEO forfeited 2,234,237 options upon departure. As a result of the modification, the Company reversed $2.1 million in stock compensation expense. The expense for the modified award was recorded at the modification date fair value.
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(B) |
The Company and the former Manager agreed that options held by certain employees formerly employed by the Manager will not terminate or be forfeited as a result of the Termination and Cooperation Agreement, and the vesting of such options will relate to the relevant holder’s employment with the Company and its affiliates following January 1, 2018. In both February 2017 and April 2018, the former Manager issued 1,152,495 options to certain employees formerly employed by the Manager as part of their compensation. The options fully vest and are exercisable one year prior to the option expiration date, beginning March 2020 through January 2024. In 2019, a certain employee was terminated by the Company and 921,992 options reverted back to the former Manager. The Company reversed $1.2 million in stock compensation expense related to these options.
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(C) |
In 2018, the Company granted 75,000 options to an employee as provided in their employment agreement. The options fully vest on the third anniversary of the grant date. In 2019, the Company granted 695,652 options to an employee that vest and become exercisable in equal annual installment on each of the first three anniversaries of the grant date.
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| Schedule of assumptions for fair value of options |
The fair value of the options was determined using the following assumptions:
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Option Valuation Date |
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January 2018 |
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April 2018 |
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November 2018 |
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April 2019 |
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November 2019 |
Expected Volatility |
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39.73 |
% |
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35.66 |
% |
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35.4 - 35.8% |
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36.80 |
% |
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44.73 |
% |
Expected Dividend Yield |
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0.00 |
% |
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0.00 |
% |
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0.00 |
% |
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0.00 |
% |
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0.00 |
% |
Expected Remaining Term |
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3.0 - 6.6 years |
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2.7 - 6.3 years |
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6.0 - 6.5 years |
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6.0 years |
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0.3 years |
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Risk-Free Rate |
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2.16 - 2.29% |
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2.68 - 2.82% |
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3.09 - 3.11% |
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2.34 |
% |
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1.57 |
% |
Fair Value at Valuation Date |
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$ |
4,272 |
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$ |
3,558 |
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$ |
7,478 |
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$ |
1,280 |
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$ |
67 |
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| Summary of changes in RSUs |
The following is a summary of the changes in the Company's RSUs for the year ended December 31, 2019:
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Number of RSUs |
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Weighted Average Grant Date Fair Value (per unit) |
Balance at December 31, 2018 |
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54,641 |
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$ |
5.02 |
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Granted (A) |
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635,819 |
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$ |
4.66 |
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Vested/Released |
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(35,647 |
) |
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$ |
5.17 |
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Forfeited (B) |
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(134,195 |
) |
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$ |
4.68 |
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Balance at December 31, 2019 |
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520,618 |
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$ |
4.66 |
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(A) |
The Company's non-employee directors were granted 56,076 RSUs during 2019 as part of the annual compensation. The RSUs are subject to a one year vesting period. The Company granted 579,743 RSUs to employees as part of their annual compensation. The RSUs vest in equal annual installments on each of the first three anniversaries of the grant date.
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(B) |
Unvested RSUs are forfeited by non-employee directors upon their departure from the board of directors and forfeited by employees upon their termination. |
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