PARTNERS’ EQUITY OF THE OPERATING PARTNERSHIP

Earnings per Common Partnership Unit

The following tables detail the number of units and net income used to calculate basic and diluted earnings per common partnership unit (in thousands, except unit and per unit amounts; results may not add due to rounding):



	Three-month periods ended September 30,
	2012						2011
	Basic			Diluted			Basic			Diluted
Numerator
Income from continuing operations	$	7,080		$	7,080		$	4,861		$	4,861
Amount allocable to unvested restricted unitholders	(95		)	(95		)	(121		)	(121		)
Preferred unit dividends	(2,785		)	(2,785		)	(1,998		)	(1,998		)
Income from continuing operations available to common unitholders	4,200			4,200			2,742			2,742
Discontinued operations attributable to common unitholders	10,009			10,009			1,750			1,750
Net income attributable to common unitholders	$	14,209		$	14,209		$	4,492		$	4,492
Denominator
Weighted-average units outstanding	146,082,206			146,082,206			145,372,247			145,372,247
Contingent securities/Share based compensation	—			703,525			—			1,278,964
Total weighted-average units outstanding	146,082,206			146,785,731			145,372,247			146,651,211
Earnings per Common Partnership Unit:
Income from continuing operations attributable to common unitholders	$	0.03		$	0.03		$	0.02		$	0.02
Discontinued operations attributable to common unitholders	0.07			0.07			0.01			0.01
Net income attributable to common unitholders	$	0.10		$	0.10		$	0.03		$	0.03



	Nine-month periods ended September 30,
	2012						2011
	Basic			Diluted			Basic			Diluted
Numerator
Loss from continuing operations	$	(3,414	)	$	(3,414	)	$	(9,278	)	$	(9,278	)
Amount allocable to unvested restricted unitholders	(286		)	(286		)	(384		)	(384		)
Preferred unit dividends	(7,832		)	(7,832		)	(5,994		)	(5,994		)
Preferred unit redemption charge	(2,090		)	(2,090		)	—			—
Loss from continuing operations available to common unitholders	(13,622		)	(13,622		)	(15,656		)	(15,656		)
Discontinued operations attributable to common unitholders	36,641			36,641			9,165			9,165
Net income (loss) attributable to common unitholders	$	23,019		$	23,019		$	(6,491	)	$	(6,491	)
Denominator
Weighted-average units outstanding	145,842,872			145,842,872			145,027,663			145,027,663
Earnings per Common Partnership Unit:
Loss from continuing operations attributable to common unitholders	$	(0.09	)	$	(0.09	)	$	(0.11	)	$	(0.11	)
Discontinued operations attributable to common unitholders	0.25			0.25			0.06			0.06
Net income (loss) attributable to common unitholders	$	0.16		$	0.16		$	(0.05	)	$	(0.05	)

Unvested restricted units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. For the nine-months ended September 30, 2012 and 2011, earnings representing nonforfeitable dividends as noted in the table above were allocated to the unvested restricted units.

Common Partnership Units and Preferred Mirror Units

On April 11, 2012, the Operating Partnership issued 6.90% Series E-Linked Preferred Mirror Units to the Parent Company, in connection with the previously mentioned Series E Preferred Share Offering. On May 3, 2012, the Operating Partnership also redeemed all of its Series D Preferred Mirror Units as a result of the aforementioned redemption of Series C Preferred Shares. In accordance with GAAP, the Operating Partnership also recognized $2.1 million of redemption costs as a reduction in net earnings to arrive at net income applicable to common units. These costs are listed above and shown within the Operating Partnership's consolidated statements of operations as "Preferred unit redemption charge". There were no comparable charges for the prior year.

On September 11, 2012, the Operating Partnership declared a distribution of $0.15 per common partnership unit, totaling $21.6 million, which was paid on October 19, 2012 to unitholders of record as of October 5, 2012.

On September 11, 2012, the Operating Partnership declared distributions on its Series E Preferred Mirror Units and Series E-Linked Preferred Mirror Units to holders of record as of September 30, 2012. These units are entitled to a preferential return of 7.375% and 6.90%, respectively. Distributions paid on October 15, 2012 to holders of Series E Preferred Mirror Units and Series E-Linked Preferred Mirror Units totaled $1.1 million and $1.8 million, respectively.

During the nine-month period ended September 30, 2012, the Parent Company did not sell any shares related to the Offering Program, and accordingly, during the nine-month period ended September 30, 2012, the Operating Partnership did not issue any common partnership units in connection with the Parent Company's Offering Program.

The Operating Partnership issued 7,111,112 Class F (2010) Units on August 5, 2010 to a third party in connection with its acquisition of Three Logan Square. The Class F (2010) Units were valued based on the closing market price of the Parent Company’s common shares on the acquisition date ($11.54) less $0.60 to reflect that these units did not begin to accrue a dividend prior to the first anniversary of their issuance. The Class F (2010) Units were subject to redemption at the option of the holders after the first anniversary of the acquisition. The Operating Partnership had the option to satisfy the redemption either for an amount, per unit, of cash equal to the market price of one of the Parent Company’s common share (based on the five-day trading average ending on the date of the exchange) or for one of the Parent Company’s common shares. On December 23, 2011, the Operating Partnership satisfied in full the holder's tender for redemption of all 7,111,112 of the Class F (2010) Units through the issuance of 7,111,112 Parent Company's common shares.

Common Unit Repurchases

The Parent Company did not repurchase any shares under its share repurchase program during the nine-month period ended September 30, 2012 and accordingly, during the nine-month period ended September 30, 2011, the Operating Partnership did not repurchase any units in connection with the Parent Company’s share repurchase program.