EARNINGS PER SHARE

We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For the three and nine months ended September 30, 2017 and 2016, we had 0.2 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below.

In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options for the three and nine months ended September 30, 2017, and no anti-dilutive stock options for the thee and nine months ended September 30, 2016. The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
	(In thousands, except per share data)
NUMERATOR
Income from continuing operations	$	58,107		$	56,253		$	175,136		$	166,701
Less: Preferred share dividends	(177		)	(136		)	(448		)	(406		)
Less: Income from continuing operations attributable to noncontrolling interests	(2,105		)	(1,982		)	(5,537		)	(5,961		)
Less: Earnings allocated to unvested shares	(317		)	(170		)	(785		)	(534		)
Income from continuing operations available for common shareholders	55,508			53,965			168,366			159,800
Gain on sale of real estate and change in control of interests, net	50,775			4,706			69,659			31,133
Net income available for common shareholders, basic and diluted	$	106,283		$	58,671		$	238,025		$	190,933
DENOMINATOR
Weighted average common shares outstanding—basic	72,091			71,319			71,983			70,626
Stock options	115			170			127			178
Weighted average common shares outstanding—diluted	72,206			71,489			72,110			70,804

EARNINGS PER COMMON SHARE, BASIC:
Net income available for common shareholders	$	1.47		$	0.82		$	3.31		$	2.70
EARNINGS PER COMMON SHARE, DILUTED:
Net income available for common shareholders	$	1.47		$	0.82		$	3.30		$	2.70
Income from continuing operations attributable to the Trust	$	56,002		$	54,271		$	169,599		$	160,740