COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share ("EPS")

Earnings Per Share ("EPS")

9 Months Ended

Sep. 30, 2021

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 redeemable noncontrolling interests and share-based compensation awards using the if-converted or treasury stock 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 September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to COPT	$	27,101	$	(31,845)	$	62,833	$	15,706
Income attributable to share-based compensation awards	(92)		(145)		(337)		(365)
Numerator for basic EPS on net income (loss) attributable to COPT common shareholders	27,009		(31,990)		62,496		15,341

Redeemable noncontrolling interests	(89)		—		(82)		—


Income attributable to share-based compensation awards	13		—		17		6
Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders	$	26,933	$	(31,990)	$	62,431	$	15,347
Denominator (all weighted averages):
Denominator for basic EPS (common shares)	111,985		111,811		111,949		111,778


Dilutive effect of redeemable noncontrolling interests	138		—		130		—
Dilutive effect of share-based compensation awards	375		—		285		278
Denominator for diluted EPS (common shares)	112,498		111,811		112,364		112,056
Basic EPS	$	0.24	$	(0.29)	$	0.56	$	0.14
Diluted EPS	$	0.24	$	(0.29)	$	0.56	$	0.14

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,
	2021	2020	2021	2020
Conversion of common units	1,262	1,240	1,257	1,235
Conversion of redeemable noncontrolling interests	782	973	793	954
Conversion of Series I Preferred Units	—	176	—	176

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

•weighted average restricted shares and deferred share awards for the three months ended September 30, 2021 and 2020 of 410,000 and 429,000, respectively, and for the nine months ended September 30, 2021 and 2020 of 416,000 and 432,000, respectively;

•weighted average unvested TB-PIUs for the three months ended September 30, 2021 and 2020 of 168,000 and 91,000, respectively, and for the nine months ended September 30, 2021 and 2020 of 155,000 and 85,000, respectively; and

•weighted average unvested PB-PIUs for the nine months ended September 30, 2021 of 228,000