Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”)

COPT and Subsidiaries EPS

We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that:

•

the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into COPT common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to COPT’s forward equity sale agreements and our share-based compensation using the treasury stock or if-converted methods; and


•	the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we added to the denominator.

Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):



	For the Three Months Ended March 31,
	2018			2017
Numerator:
Net income attributable to COPT	$	17,150		$	21,019
Preferred share dividends	—			(3,180		)
Income attributable to share-based compensation awards	(117		)	(125		)
Numerator for basic and diluted EPS on net income attributable to COPT common shareholders	$	17,033		$	17,714
Denominator (all weighted averages):
Denominator for basic EPS (common shares)	100,999			98,411
Dilutive effect of share-based compensation awards	144			155
Denominator for diluted EPS (common shares)	101,143			98,566
Basic EPS	$	0.17		$	0.18
Diluted EPS	$	0.17		$	0.18

Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands):



	Weighted Average Shares Excluded from Denominator
	For the Three Months Ended March 31,
	2018	2017
Conversion of common units	3,221	3,446
Conversion of Series I preferred units	176	176

The following securities were also excluded from the computation of diluted EPS because their effects were not dilutive:


•	weighted average shares related to COPT’s forward equity sale agreements for the three months ended March 31, 2018 of 7.5 million;


•	weighted average restricted shares and deferred share awards for the three months ended March 31, 2018 and 2017 of 444,000 and 392,000, respectively; and


•	weighted average options for the three months ended March 31, 2018 and 2017 of 60,000 and 140,000, respectively.

COPLP and Subsidiaries EPU

We present both basic and diluted EPU. We compute basic EPU by dividing net income available to common unitholders allocable to unrestricted common units under the two-class method by the weighted average number of unrestricted common units outstanding during the period. Our computation of diluted EPU is similar except that:

•

the denominator is increased to include: (1) the weighted average number of potential additional common units that would have been outstanding if securities that are convertible into our common units were converted; and (2) the effect of dilutive potential common units outstanding during the period attributable to COPT’s forward equity sale agreements and our share-based compensation using the treasury stock or if-converted methods; and


•	the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common units that we added to the denominator.

Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data):



	For the Three Months Ended March 31,
	2018			2017
Numerator:
Net income attributable to COPLP	$	17,859		$	21,806
Preferred unit distributions	(165		)	(3,345		)
Income attributable to share-based compensation awards	(117		)	(125		)
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders	$	17,577		$	18,336
Denominator (all weighted averages):
Denominator for basic EPU (common units)	104,220			101,857
Dilutive effect of share-based compensation awards	144			155
Denominator for diluted EPU (common units)	104,364			102,012
Basic EPU	$	0.17		$	0.18
Diluted EPU	$	0.17		$	0.18

Our diluted EPU computations do not include the effect of 176,000 common units resulting from an assumed conversion of the Series I preferred units since such a conversion would increase diluted EPU for the three months ended March 31, 2018 and 2017. The following securities were also excluded from the computation of diluted EPU because their effects were not dilutive:


•	weighted average shares related to COPT’s forward equity sale agreements for the three months ended March 31, 2018 of 7.5 million;


•	weighted average restricted units and deferred share awards for the three months ended March 31, 2018 and 2017 of 444,000 and 392,000, respectively; and


•	weighted average options for the three months ended March 31, 2018 and 2017 of 60,000 and 140,000, respectively.