Earnings Per Unit of the Operating Partnership

The following table sets forth a reconciliation of the numerators and denominators in computing the Operating Partnership's earnings per unit (in thousands, except per unit data):



	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Numerator
Net income attributable to partners of the Operating Partnership	$	16,163		$	14,194		$	37,487		$	35,853
Less allocation of earnings to participating securities	(209		)	(164		)	(576		)	(521		)
Net income available to common unitholders of the Operating Partnership	$	15,954		$	14,030		$	36,911		$	35,332
Denominator
Basic weighted average common units	24,432			24,248			24,414			23,512
Effect of notional units	220			158			216			158
Effect of senior exchangeable notes	—			29			—			29
Effect of outstanding options	23			18			20			18
Diluted weighted average common units	24,675			24,453			24,650			23,717
Basic earnings per common unit:
Net income	$	0.65		$	0.58		$	1.51		$	1.50
Diluted earnings per common unit:
Net income	$	0.65		$	0.57		$	1.50		$	1.49

The notional units are considered contingently issuable common units and are included in earnings per unit if the effect is dilutive using the treasury stock method.

When the Company issues common shares upon exercise of options or issues restricted share awards, the Operating Partnership issues one corresponding unit to the Company for every four common shares issued. Outstanding senior, exchangeable notes were included in the diluted earnings per unit computation, if the effect was dilutive, using the treasury stock method. In applying the treasury stock method, the effect was dilutive if the average market price of the Company's common shares for at least 20 trading days in the 30 consecutive trading days at the end of each quarter were higher than the exchange price, which prior to redemption was $17.83 per common share. There were no outstanding senior, exchangeable notes as of September 30, 2012.

The computation of diluted earnings per unit excludes units that would be issued upon the exercise of options to purchase the Company's common shares when the exercise price is greater than the average market price of the Company's common shares for the period. For the three months ended September 30, 2012 no units were excluded from the computation. For the three months ended September 30, 2011, 46,250 units, which would be issued upon the exercise of outstanding options, were excluded from the computation. For the nine months ended September 30, 2012 and 2011, 41,950 and 46,250 units, respectively, which would be issued upon the exercise of outstanding options, were excluded from the computation.

Certain of the Company's unvested restricted common share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted unit awards on earnings per unit has been calculated using the two-class method whereby earnings are allocated to the unvested restricted unit awards based on distributions declared and the unvested restricted units' participation rights in undistributed earnings.