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Earnings Per Share
9 Months Ended
Sep. 30, 2011
Earnings Per Share [Abstract] 
EARNINGS PER SHARE
14. EARNINGS PER SHARE

The Company’s unvested restricted share units contain rights to receive nonforfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share (“EPS”). Under the two-class method, EPS is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The following table provides a reconciliation of net loss from continuing operations and the number of common shares used in the computations of “basic” EPS, which uses the weighted average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):

 

                                 
   

Three-Month Periods

Ended September 30,

    

Nine-Month Periods

Ended September 30,

  
    2011     2010     2011     2010  

Basic Earnings:

                        

Continuing Operations:

                        

Loss from continuing operations

   $ (48,043 )    $ (12,598 )    $ (10,952 )    $ (70,202 ) 

Plus: Gain on disposition of real estate

     6,587       145       8,036       61  

Plus: Income (loss) attributable to non-controlling interests

     3,693       (108 )      3,512       12,088  
   

 

 

    

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations attributable to DDR

     (37,763 )      (12,561 )      596       (58,053 ) 

Write-off of original preferred share issuance costs

     —         —         (6,402 )      —    

Preferred dividends

     (6,967 )      (10,567 )      (24,620 )      (31,702 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Basic — Loss from continuing operations attributable to DDR common shareholders

     (44,730 )      (23,128 )      (30,426 )      (89,755 ) 

Less: Earnings attributable to unvested shares and operating partnership units

     (152 )      (46 )      (361 )      (138 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Basic — Loss from continuing operations

   $ (44,882 )    $ (23,174 )    $ (30,787 )    $ (89,893 ) 

Discontinued Operations:

                        

Loss from discontinued operations

     (5,226 )      (3,307 )      (21,656 )      (93,371 ) 

Plus: Loss attributable to non-controlling interests

     —         1,558       —         26,292  
   

 

 

    

 

 

    

 

 

    

 

 

  

Basic — Loss from discontinued operations

     (5,226 )      (1,749 )      (21,656 )      (67,079 ) 

Basic — Net loss attributable to DDR common shareholders after allocation to participating securities

   $ (50,108 )    $ (24,923 )    $ (52,443 )    $ (156,972 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Diluted Earnings:

                        

Continuing Operations:

                        

Basic — Loss from continuing operations attributable to DDR common shareholders

   $ (44,730 )    $ (23,128 )    $ (30,426 )    $ (89,755 ) 

Less: Earnings attributable to unvested shares and operating partnership units

     (152 )      (46 )      (361 )      (138 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Diluted — Loss from continuing operations

     (44,882 )      (23,174 )      (30,787 )      (89,893 ) 

Discontinued Operations:

                        

Basic — Loss from discontinued operations

     (5,226 )      (1,749 )      (21,656 )      (67,079 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Diluted—Net loss attributable to DDR common shareholders after allocation to participating securities

   $ (50,108 )    $ (24,923 )    $ (52,443 )    $ (156,972 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Number of Shares:

                        

Basic and diluted — Average shares outstanding

     274,639       249,139       268,270       241,679  
   

 

 

    

 

 

    

 

 

    

 

 

  

Basic Earnings Per Share:

                        

Loss from continuing operations attributable to DDR common shareholders

   $ (0.16 )    $ (0.09 )    $ (0.12 )    $ (0.37 ) 

Loss from discontinued operations attributable to DDR common shareholders

     (0.02 )      (0.01 )      (0.08 )      (0.28 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net loss attributable to DDR common shareholders

   $ (0.18 )    $ (0.10 )    $ (0.20 )    $ (0.65 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Dilutive Earnings Per Share:

                        

Loss from continuing operations attributable to DDR common shareholders

   $ (0.16 )    $ (0.09 )    $ (0.12 )    $ (0.37 ) 

Loss from discontinued operations attributable to DDR common shareholders

     (0.02 )      (0.01 )      (0.08 )      (0.28 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net loss attributable to DDR common shareholders

   $ (0.18 )    $ (0.10 )    $ (0.20 )    $ (0.65 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following potentially dilutive securities are considered in the calculation of EPS as described below:

Anti-dilutive Securities:

 

  •  

Warrants to purchase 10.0 million common shares issued in 2009 were anti-dilutive for all of the periods presented, as the options were anti-dilutive due to the Company’s loss from continuing operations

 

  •  

Shares subject to issuance under the Company’s value sharing equity program (“VSEP”) were not considered in the computation of diluted EPS for all of the periods presented, as the shares were anti-dilutive due to the Company’s loss from continuing operations.

 

  •  

Options to purchase 2.7 million and 3.3 million common shares were outstanding at September 30, 2011 and 2010, respectively and were not considered in the computation of diluted EPS for all of the periods presented, as the options were anti-dilutive due to the Company’s loss from continuing operations.

 

  •  

The forward equity agreement entered into in March 2011 for 9.5 million common shares was not included in the computation of diluted EPS using the treasury stock method for the nine-month period ended September 30, 2011 due to the Company’s loss from continuing operations. These shares were issued in April 2011. This agreement was not in effect in 2010.

 

  •  

The Company’s two series of senior convertible notes due 2012 and 2040, which are convertible into common shares of the Company with conversion prices of approximately $74.56 and $16.27, respectively, at September 30, 2011, were not included in the computation of diluted EPS for the three- and nine-month periods ended September 30, 2011 and 2010, because the Company’s common share price did not exceed the conversion prices of the conversion features in these periods and would therefore be anti-dilutive. The Company’s senior convertible notes due 2011, which were convertible into common shares of the Company at the conversion price of approximately $64.23 at September 30, 2010, were not included in the computation of diluted EPS for the nine-month period ended September 30, 2011 and the three- and nine-month periods ended September 30, 2010, because the Company’s common share price did not exceed the conversion prices of the conversion features in these periods and would therefore be anti-dilutive. The senior convertible notes due 2011 were repaid at maturity in August 2011. In addition, the purchased options related to two of the senior convertible notes issuances are not included in the computation of diluted EPS as the purchase options are anti-dilutive.