Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) 
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 twoclass 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 sharebased compensation using the treasury stock or ifconverted 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 September 30, 

For the Nine Months Ended September 30, 

2016 

2015 

2016 

2015 
Numerator: 









(Loss) income from continuing operations 
$ 
(4,829 
) 

$ 
94,279 


$ 
(45,049 
) 

$ 
122,105 

Gain on sales of real estate, net 
34,101 


15 


34,101 


4,000 

Preferred share dividends 
(3,552 
) 

(3,552 
) 

(10,657 
) 

(10,657 
) 
Income from continuing operations attributable to noncontrolling interests 
(1,973 
) 

(4,494 
) 

(2,346 
) 

(7,322 
) 
Income from continuing operations attributable to sharebased compensation awards 
(105 
) 

(369 
) 

(319 
) 

(475 
) 
Numerator for basic EPS from continuing operations attributable to COPT common shareholders 
23,642 


85,879 


(24,270 
) 

107,651 

Convertible preferred shares 
— 


372 


— 


— 

Dilutive effect of common units in COPLP on diluted EPS from continuing operations 
— 


— 


— 


4,225 

Numerator for diluted EPS from continuing operations attributable to COPT common shareholders 
$ 
23,642 


$ 
86,251 


$ 
(24,270 
) 

$ 
111,876 

Numerator for basic EPS from continuing operations attributable to COPT common shareholders 
$ 
23,642 


$ 
85,879 


$ 
(24,270 
) 

$ 
107,651 

Discontinued operations 
— 


— 


— 


156 

Discontinued operations attributable to noncontrolling interests 
— 


— 


— 


(3 
) 
Numerator for basic EPS on net income attributable to COPT common shareholders 
23,642 


85,879 


(24,270 
) 

107,804 

Convertible preferred shares 
— 


372 


— 


— 

Dilutive effect of common units in COPLP 
— 


— 


— 


4,231 

Numerator for diluted EPS on net income attributable to COPT common shareholders 
$ 
23,642 


$ 
86,251 


$ 
(24,270 
) 

$ 
112,035 

Denominator (all weighted averages): 









Denominator for basic EPS (common shares) 
94,433 


94,153 


94,312 


93,830 

Convertible preferred shares 
— 


434 


— 


— 

Dilutive effect of common units 
— 


— 


— 


3,697 

Dilutive effect of sharebased compensation awards 
81 


21 


— 


82 

Denominator for diluted EPS (common shares) 
94,514 


94,608 


94,312 


97,609 

Basic EPS: 









(Loss) income from continuing operations attributable to COPT common shareholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Discontinued operations attributable to COPT common shareholders 
0.00 


0.00 


0.00 


0.00 

Net (loss) income attributable to COPT common shareholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Diluted EPS: 









(Loss) income from continuing operations attributable to COPT common shareholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Discontinued operations attributable to COPT common shareholders 
0.00 


0.00 


0.00 


0.00 

Net (loss) income attributable to COPT common shareholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

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 September 30, 

For the Nine Months Ended September 30, 

2016 

2015 

2016 

2015 
Conversion of common units 
3,591 


3,679 


3,648 


— 

Conversion of Series I Preferred Units 
176 


176 


176 


176 

Conversion of Series K Preferred Shares 
434 


— 


434 


434 

The following sharebased compensation securities were excluded from the computation of diluted EPS because their effects were antidilutive:


• 
weighted average restricted shares and deferred share awards for the three months ended September 30, 2016 and 2015 of 375,000 and 411,000, respectively, and for the nine months ended September 30, 2016 and 2015 of 394,000 and 412,000, respectively; and



• 
weighted average options for the three months ended September 30, 2016 and 2015 of 233,000 and 440,000, respectively, and for the nine months ended September 30, 2016 and 2015 of 307,000 and 480,000, respectively.

We had outstanding senior notes, which we redeemed in April 2015, with an exchange settlement feature, but such notes did not affect our diluted EPS reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods.
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 twoclass 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 sharebased compensation using the treasury stock or ifconverted 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 September 30, 

For the Nine Months Ended September 30, 

2016 

2015 

2016 

2015 
Numerator: 









(Loss) income from continuing operations 
$ 
(4,829 
) 

$ 
94,279 


$ 
(45,049 
) 

$ 
122,105 

Gain on sales of real estate, net 
34,101 


15 


34,101 


4,000 

Preferred unit distributions 
(3,717 
) 

(3,717 
) 

(11,152 
) 

(11,152 
) 
Income from continuing operations attributable to noncontrolling interests 
(913 
) 

(972 
) 

(2,803 
) 

(2,605 
) 
Income from continuing operations attributable to sharebased compensation awards 
(105 
) 

(369 
) 

(319 
) 

(475 
) 
Numerator for basic EPU from continuing operations attributable to COPLP common unitholders 
24,537 


89,236 


(25,222 
) 

111,873 

Convertible preferred units 
— 


372 


— 


— 

Numerator for diluted EPU from continuing operations attributable to COPLP common unitholders 
$ 
24,537 


$ 
89,608 


$ 
(25,222 
) 

$ 
111,873 









Numerator for basic EPU from continuing operations attributable to COPLP common unitholders 
$ 
24,537 


$ 
89,236 


$ 
(25,222 
) 

$ 
111,873 

Discontinued operations 
— 


— 


— 


156 

Discontinued operations attributable to noncontrolling interests 
— 


— 


— 


3 

Numerator for basic EPU on net income attributable to COPLP common unitholders 
24,537 


89,236 


(25,222 
) 

112,032 

Convertible preferred units 
— 


372 


— 


— 

Numerator for diluted EPU on net income attributable to COPLP common unitholders 
$ 
24,537 


$ 
89,608 


$ 
(25,222 
) 

$ 
112,032 

Denominator (all weighted averages): 









Denominator for basic EPU (common units) 
98,024 


97,832 


97,960 


97,527 

Convertible preferred shares 
— 


434 


— 


— 

Dilutive effect of sharebased compensation awards 
81 


21 


— 


82 

Denominator for diluted EPU (common units) 
98,105 


98,287 


97,960 


97,609 

Basic EPU: 









(Loss) income from continuing operations attributable to COPLP common unitholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Discontinued operations attributable to COPLP common unitholders 
0.00 


0.00 


0.00 


0.00 

Net (loss) income attributable to COPLP common unitholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Diluted EPU: 









(Loss) income from continuing operations attributable to COPLP common unitholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

Discontinued operations attributable to COPLP common unitholders 
0.00 


0.00 


0.00 


0.00 

Net (loss) income attributable to COPLP common unitholders 
$ 
0.25 


$ 
0.91 


$ 
(0.26 
) 

$ 
1.15 

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














Weighted Average Units Excluded from Denominator 

For the Three Months Ended September 30, 

For the Nine Months Ended September 30, 

2016 

2015 

2016 

2015 
Conversion of Series I preferred units 
176 


176 


176 


176 

Conversion of Series K preferred units 
434 


— 


434 


434 

The following sharebased compensation securities were excluded from the computation of diluted EPU because their effects were antidilutive:


• 
weighted average restricted units and deferred share awards for the three months ended September 30, 2016 and 2015 of 375,000 and 411,000, respectively, and for the nine months ended September 30, 2016 and 2015 of 394,000 and 412,000, respectively; and



• 
weighted average options for the three months ended September 30, 2016 and 2015 of 233,000 and 440,000, respectively, and for the nine months ended September 30, 2016 and 2015 of 307,000 and 480,000, respectively.

We had outstanding senior notes, which we redeemed in April 2015, with an exchange settlement feature, but such notes did not affect our diluted EPU reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods.
