Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share ("EPS") and Earnings Per Unit ("EPU")

v3.19.2
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU")
6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
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 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 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, redeemable noncontrolling interests 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 add 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 June 30,
 
For the Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Numerator:
 

 
 

 
 
 
 
Net income attributable to COPT
$
106,791

 
$
19,434

 
$
127,650

 
$
36,584

Income attributable to share-based compensation awards
(364
)
 
(117
)
 
(413
)
 
(234
)
Numerator for basic EPS on net income attributable to COPT common shareholders
106,427

 
19,317

 
127,237

 
36,350

Preferred unit distributions
165

 

 

 

Redeemable noncontrolling interests
902

 

 
66

 

Common units in the Operating Partnership

 

 
1,515

 

Income attributable to share-based compensation awards
18

 

 
22

 

Numerator for diluted EPS on net income attributable to COPT common shareholders
$
107,512

 
$
19,317

 
$
128,840

 
$
36,350

Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPS (common shares)
111,557

 
101,789

 
110,759

 
101,397

Dilutive convertible preferred units
176

 

 

 

Dilutive effect of common units

 

 
1,329

 

Dilutive effect of share-based compensation awards
310

 
119

 
289

 
131

Dilutive effect of redeemable noncontrolling interests
1,062

 

 
130

 

Denominator for diluted EPS (common shares)
113,105

 
101,908

 
112,507

 
101,528

Basic EPS
$
0.95

 
$
0.19

 
$
1.15

 
$
0.36

Diluted EPS
$
0.95

 
$
0.19

 
$
1.15

 
$
0.36


 
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 June 30,
 
For the Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Conversion of common units
1,327

 
3,197

 

 
3,208

Conversion of redeemable noncontrolling interests

 

 
907

 

Conversion of Series I preferred units

 
176

 
176

 
176


 
The following securities were also excluded from the computation of diluted EPS because their effect was antidilutive:

weighted average shares related to COPT’s forward equity sale agreements for the three months ended June 30, 2018 of 6.8 million, and for the six months ended June 30, 2019 and 2018 of 758,000 and 7.1 million, respectively;
weighted average restricted shares and deferred share awards for the three months ended June 30, 2019 and 2018 of 425,000 and 458,000, respectively, and for the six months ended June 30, 2019 and 2018 of 444,000 and 451,000, respectively;
weighted average options for the three months ended June 30, 2019 and 2018 of 17,000 and 47,000, respectively, and for the six months ended June 30, 2019 and 2018 of 23,000 and 53,000, respectively; and
weighted average unvested PIUs of 59,000 and 39,000 for the three and six months ended June 30, 2019, 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, redeemable noncontrolling interests 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 add 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 June 30,
 
For the Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Numerator:
 

 
 

 
 
 
 
Net income attributable to COPLP
$
108,295

 
$
20,207

 
$
129,576

 
$
38,066

Preferred unit distributions
(165
)
 
(165
)
 
(330
)
 
(330
)
Income attributable to share-based compensation awards
(438
)
 
(117
)
 
(494
)
 
(234
)
Numerator for basic EPU on net income attributable to COPLP common unitholders
107,692

 
19,925

 
128,752

 
37,502

Redeemable noncontrolling interests
902

 

 
66

 

Income attributable to share-based compensation awards
18

 

 
22

 

Dilutive effective of preferred units
165

 

 

 

Numerator for diluted EPU on net income attributable to COPLP common unitholders
$
108,777

 
$
19,925

 
$
128,840

 
$
37,502

Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPU (common units)
112,884

 
104,986

 
112,088

 
104,605

Dilutive convertible preferred units
176

 

 

 

Dilutive effect of redeemable noncontrolling interests
1,062

 

 
130

 

Dilutive effect of share-based compensation awards
310

 
119

 
289

 
131

Denominator for diluted EPU (common units)
114,432

 
105,105

 
112,507

 
104,736

Basic EPU
$
0.95

 
$
0.19

 
$
1.15

 
$
0.36

Diluted EPU
$
0.95

 
$
0.19

 
$
1.15

 
$
0.36


 
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 Shares Excluded from Denominator
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Conversion of redeemable noncontrolling interests

 

 
907

 

Conversion of Series I preferred units

 
176

 
176

 
176



The following securities were also excluded from the computation of diluted EPU because their effect was antidilutive:

weighted average shares related to COPT’s forward equity sale agreements for the three months ended June 30, 2018 of 6.8 million, and for the six months ended June 30, 2019 and 2018 of 758,000 and 7.1 million, respectively;
weighted average restricted units and deferred share awards for the three months ended June 30, 2019 and 2018 of 425,000 and 458,000, respectively, and for the six months ended June 30, 2019 and 2018 of 444,000 and 451,000, respectively;
weighted average options for the three months ended June 30, 2019 and 2018 of 17,000 and 47,000, respectively, and for the six months ended June 30, 2019 and 2018 of 23,000 and 53,000, respectively; and
weighted average unvested PIUs of 59,000 and 39,000 for the three and six months ended June 30, 2019, respectively.